Tax

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Rohit (Querist)
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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.

Thanks

CS,CA F,Numrologi TusharSampat

CS,CA F,Numrologi TusharSampat (Expert)
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23 October 2013 State where SEZ units are situated get max benefit under taxation with the fullfilment of prescribed conditions.

Rohit

Rohit (Querist)
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23 October 2013 Thanks

But what about Subsidies and products for which such subsidies are available.

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
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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?

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