AFFECTED FLOWOutflow (subsidised)
ANNOUNCED AS TEMPORARYNo
Tax-based export incentive
As of 7 December 2008, the Indian government has extended its service tax refund scheme to another constituency. Now, exporters who have paid commissions to a foreign clearing or forwarding agent are also eligible for the benefits of such a refund. The maximum share of service tax to be refunded has been set at 10 percent of the freight on board (f.o.b.) value of exports.
This measure will benefit firms that contract out for freight-forwarding services. On the assumption that most of these firms are small and medium sized enterprises, then the tariff lines affected are those typically associated with exports by such enterprises from India.
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