Income Tax Exemption & Deductions

The following exemptions at specified rates are available to the exporters and other foreign exchange earners under the Income Tax Act 1961.

  • 10 years Tax exemption in respect of Newly Established Industrial Undertaking in Free Trade Zone, Electronic Hardware Technology Parks or Software Technology Parks or Special Economic Zones.
  • 15 years Tax exemption for New SEZ units.
  • 10 years Tax exemption in respect of newly established 100% Export Oriented Unit.
  • Tax exemption for exporters of wood based Handicrafts.

Central Sales Tax Exemptions:

  • Any dealer who is registered with the sales tax authorities can claim the exemption from sales tax in respect of his sales made in the course of exports out of the territory of India.
  • The exporter may also buy the goods from dealer/manufacturer for the purpose of export trade without payment of sales tax.
  • The basic condition to avail the sales tax exemption is that the exporter should be registered with the sales tax department.

Reimbursement of Central Sales Tax To 100% Export Oriented Units (EOU) & EHTP/STP

  • 100% EOU and EHTP/STP units are entitled to full reimbursement of Central Sales Tax paid by them on purchases made by them from Domestic Tariff Area (DTA) for utilization in the production of goods for export.
  • The supplies from DTA must be utilized for export production and may include raw material, components, consumables, packing materials, capital goods, material handling equipment etc on which CST has actually been paid by the unit.

Exemption From Service Tax:

  • Export of Service Rules 2005, states that any service which is taxable under the law may be exported without payment of service tax.

Exemption/Remission Of Service Tax In DTA:

  • For all goods and services which are exported from units in DTA and units in EOU/EHTP/STP/BTP exemption/remission is applicable.