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TranslateIncentives/Benefits available for export of Tobacco and Tobacco products from India:
\n1. Duty Draw Back Scheme:
\nThe Duty Drawback Scheme seeks to rebate duty or tax chargeable on any imported / excisable materials and input services used in the manufacture of export goods, prior to export. The duties and tax neutralized under the scheme are (i) Customs and Union Excise Duties in respect of inputs and (ii) Service Tax in respect of input services. The exporters are entitled to claim duty drawback as soon as the exports are completed, at the post of discharge, after evidencing of ‘Let Export Order’ issued by the concerned customs authorities.
\nThe All Industry Rates (AIR) of Duty Drawback for tobacco and tobacco products notified by the Department of Revenue, Ministry of Finance vide Notification No. 07/2020-CUSTOMS (N.T.) dated 28.01.2020 and amended subsequently vide notification no. 108/2021-Customs (N.T.) dated 31.12.2021 are given below:
\n| \n Tariff Item \n | \n\n Description of goods \n | \n\n Drawback rate \n | \n
| \n 2401 \n | \n\n Unmanufactured tobacco; tobacco refuse \n | \n\n 0.15% \n | \n
| \n 2402 \n | \n\n Cigar, cheroots, cigarillos and cigarettes, of tobacco or of tobacco substitutes \n | \n\n 0.15% \n | \n
| \n 2403 \n | \n\n Other manufactured tobacco and manufactured tobacco substitutes; “homogenized” or “reconstituted” tobacco; tobacco extracts and essences \n | \n\n \n 0.15% \n | \n
| \n 2404 \n | \n\n Products containing tobacco, reconstituted tobacco, nicotine, or tobacco or nicotine substitutes, intended for inhalation without combustion; other nicotine containing products intended for the intake of nicotine into the human body \n | \n\n 0.15% \n | \n
2. Interest Equalization Scheme (IES):
\nThe Interest Equalization Scheme (IES) for Pre and Post Shipment Rupee Export Credit is being implemented by the Directorate General of Foreign Trade (DGFT) through RBI and its network of banks. The scheme came into effect from 01.04.2015 and is for a period of 05 years. Validity of the scheme was up to September 30, 2021.
\n3. Extension of Interest Equalization Scheme:
\nAs per the RBI Notification No. RBI/2021-22/180 DOR. STR.REC.93/04.02.001/ 2021-22 dated 08.03.2022, the Government of India has approved the extension of the Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit up to March 31, 2024 or till further review, whichever is earlier. The extension takes effect from October 1, 2021 and ends on March 31, 2024. The rates for IES has been revised as 3% for MSMEs and 2% for manufacturers and merchant exporters of 410 tariffs specified lines (Tariff lines under Chapter 24 are not included in these 410 tariff lines).
\nExporters of tobacco and tobacco products having MSME registration are eligible to avail benefits under this scheme.
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