23 October 2013
In which state of India maximum tax benefit is available for a company engaged in exports. If any subsidies are available then also provide the details. If possible plz also tell in which kind of products a company can deal to avail such tax benefit and subsidy.
26 July 2025
Sure! Here’s a detailed overview regarding tax benefits, subsidies, and products for export companies in India:
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### 1. **States Offering Maximum Tax Benefits for Exporters**
* **Special Economic Zones (SEZs)** are spread across many states (e.g., Maharashtra, Gujarat, Tamil Nadu, Karnataka, Andhra Pradesh, Telangana). * Companies located in **SEZs enjoy significant tax benefits**, including:
* **100% Income Tax exemption on export profits for first 5 years** * 50% exemption for next 5 years * 50% of ploughed-back export profits exemption for next 5 years * Exemption from **Customs Duty, Central Excise, and Service Tax** on goods and services used in the SEZ unit * Other states offer **state-specific incentives** such as stamp duty exemption, power subsidy, investment subsidy, etc., but SEZ benefits are among the most comprehensive.
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### 2. **Subsidies Available**
* **Central Government Schemes:**
* **Merchandise Exports from India Scheme (MEIS)** — now replaced by **Remission of Duties and Taxes on Exported Products (RoDTEP)**, providing refunds on embedded taxes. * **Interest Equalization Scheme** on pre and post-shipment export credit. * **Export Promotion Capital Goods (EPCG) Scheme** — allows import of capital goods at reduced customs duty for export production. * **State Government Subsidies:**
* Capital subsidy or grants for setting up manufacturing units. * Power tariff subsidies. * Subsidies on infrastructure like transport and warehousing. * Stamp duty exemption on purchase of land/building.
Each state has its **own export promotion policies**, so subsidies vary.
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### 3. **Products Eligible for Tax Benefits and Subsidies**
* Benefits depend mostly on the **export zone/unit status** rather than product category. * However, some **focus sectors** for government export incentives include:
* Textiles and Apparel * Leather and Footwear * Pharmaceuticals and Chemicals * Engineering Goods and Auto Components * Handicrafts and Handlooms * Electronics and IT Hardware * Agricultural Products and Food Processing
SEZ units engaged in **any export-oriented business** generally qualify for tax incentives.
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### Summary:
| Aspect | Details | | ----------------- | --------------------------------------------------------------------------------------------- | | Best States | States with SEZs like Maharashtra, Gujarat, Tamil Nadu, Karnataka, Telangana, Andhra Pradesh | | Major Subsidies | RoDTEP, Interest Equalization Scheme, EPCG, State subsidies on power, capital, infrastructure | | Eligible Products | Wide range including textiles, pharma, engineering, electronics, agro-products, handicrafts |
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If you want, I can provide links to state-wise export policies or specific subsidy schemes. Would you like that?
CAclubindia
