Income tax benefits on exporter

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

15 January 2015 Dear Sir

I are trader and selling goods in india But in current year we have also made export. What types of income tax benefits are available to us on account of export ??

CA NAVEEN SINGLA

CA NAVEEN SINGLA (Expert)
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15 January 2015
In Normal Situations
No Export Benefit is provided in Income Tax right now The Export Benefits were earlier in f.y 2007-08 or before.

Plz specify your nature of business so that we can see for specific Tax benefits for you.

Rupesh Jain

Rupesh Jain (Expert)
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15 January 2015 at present no benefit for export . but you have to see the specific item for export.

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Querist : Anonymous

Querist : Anonymous (Querist)

15 January 2015 Sir

We are doing mining activity and exporting china clay

Asha Kanta Sharma

Asha Kanta Sharma

(Expert)
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31 July 2024 As an exporter engaged in selling goods abroad, such as China clay, there are several Income Tax benefits and incentives you can avail of. These benefits are designed to encourage exports and can significantly impact your tax liability. Here’s an overview of the tax benefits available to exporters:

### **Income Tax Benefits for Exporters**

1. **Section 10AA: Tax Holiday for SEZ Units**
- **Eligibility:** If you operate from a Special Economic Zone (SEZ), you can claim a 100% tax exemption on profits derived from export activities for the first five years, 50% for the next five years, and 50% of the reinvested profits for the subsequent five years.
- **Benefit:** This is particularly beneficial if your operations are within an SEZ, reducing your taxable income substantially.

2. **Section 80HHC: Export Profit Deduction**
- **Eligibility:** For export profits derived from the export of goods or merchandise, you can claim a deduction under Section 80HHC.
- **Benefit:** This allows you to claim a deduction of 100% of the profit earned from exports, subject to certain conditions and calculations.

3. **Section 80-IB(1): Deduction for Profits of Industrial Undertakings**
- **Eligibility:** If you are engaged in the business of manufacturing or producing articles or things, including mining and processing of minerals, you may be eligible for a deduction of 100% of the profits for the first five years, and 25% (30% for new units) for the next five years.
- **Benefit:** This section provides substantial relief for industrial undertakings, including those involved in mining and processing.

4. **Section 80-IE: Deduction for Profits from Business of Manufacturing or Production in Certain States**
- **Eligibility:** This section is applicable to industries located in certain states (like North-Eastern states and Himachal Pradesh) and provides a deduction of 100% of profits.
- **Benefit:** If your operations are located in the specified states, you can benefit from this deduction.

5. **Export Incentives under the Foreign Trade Policy (FTP)**
- **Duty Drawback:** You can claim a refund on customs duties paid on imported inputs used in the export products.
- **Merchandise Export from India Scheme (MEIS):** Provides rewards in the form of duty credit scrips for certain export goods to specific markets.
- **Export Promotion Capital Goods (EPCG) Scheme:** Allows import of capital goods at reduced or zero duty subject to certain export obligations.

6. **Goods and Services Tax (GST) Benefits**
- **Zero-Rated Supplies:** Exports are treated as zero-rated supplies under GST. This allows you to claim a refund of the input tax credit (ITC) on inputs used for making the exported goods.
- **Refund of ITC:** You can claim a refund of the GST paid on inputs, input services, and capital goods used in the export of goods.

7. **Customs Duty Exemptions**
- **Customs Duty Exemptions:** As an exporter, you may be eligible for exemptions from customs duty on raw materials and capital goods used in the production of export goods.

### **Record-Keeping and Compliance**

- **Documentation:** Ensure you maintain proper records of exports, including shipping documents, invoices, and proof of receipt of foreign exchange.
- **Compliance:** Adhere to all regulatory requirements for claiming these benefits, including filing the necessary forms and documentation with the Income Tax Department, GST authorities, and customs.

### **Summary**

- **SEZ Units:** Tax exemptions for profits derived from export activities.
- **Section 80HHC/80-IB/80-IE:** Deduction on export profits and industrial undertaking profits.
- **FTP Incentives:** Duty drawback, MEIS rewards, EPCG scheme benefits.
- **GST Benefits:** Refund of input tax credit on zero-rated supplies.
- **Customs Duty Exemptions:** On raw materials and capital goods used for exports.

For detailed guidance and to ensure compliance with all regulations, consider consulting a tax advisor or professional who specializes in export taxation and incentives.