Duty Exemption and Remission Scheme

Launched by the Ministry of Commerce and Industry, the Duty Exemption scheme allows duty-free import of inputs that are required for the production of export. Under the Duty Remission Scheme, post export replenishment of duty is provided on inputs that are used in the export products.

Different Categories of Duty Exemption and Remission Scheme

The different schemes that come under the Duty Exemption and Remission Scheme are mentioned below:

Duty Exemption Scheme

  • Duty Free Import Authorisation (DFIA) Scheme
  • Advance Authorisation Scheme

Duty Remission Scheme

  • Duty Drawback (DBK) Scheme
  • Duty Entitlement Passbook (DEPB) Scheme

Highlights & Benefits of Duty Exemption and Remission Scheme

The main highlights and benefits of the Duty Exemption and Remission Scheme are mentioned below:

  • Issuance of an Advanced License that allows duty-free import of inputs that are physically present in the exported product.
  • Under the scheme, benefits will be provided for catalysts, energy, oil, fuel, etc., that are required to obtain the product.

Advance License is provided for the below-mentioned exports and supplies:

  • Deemed exports: The license is issued to the main contractor that import products that are used for the manufacture of goods. However, the goods must be supplied to categories that are mentioned in the Policy (Paragraph 8.2 (b), (c), (d), (e), (f), (g), (i), and (j)).
  • Intermediate supplies: The license is given to a manufacturer-exporter for the import of products to manufacture goods. However, the manufactured goods must be provided to a deemed exporter who has an Advanced License.
  • Physical exports: The license is provided for the physical export of goods to a merchant exporter. However, the exporter must help manufacturers import inputs that are required to export products.

Financial Benefits of Duty Exemption and Remission Scheme

The main financial benefits of the scheme are mentioned below:

  • Under the Duty Exemption Scheme, duty-free import of inputs that are needed for export production is allowed.
  • Under the Duty Remission Scheme, post export replenishment of the duty on inputs that are used for the exported product is provided.

Duty Exemption and Remission Scheme Eligibility Criteria

The eligibility criteria that must be met to avail the benefits of the scheme are mentioned below:

  • An Advance License will be provided only to Micro, Small, and Medium Enterprises (MSMEs) that are involved in the export business.
  • Other details regarding the eligibility criteria can be found on http://dgftcom.nic.in/exim/2000/policy/chap-04.htm.

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