INCOME FROM EXPORT OF ARTISTIC HANDMADE WOODEN ARTICLES [ Section 10BA]
A deduction of such profits and gains as are derived by an undertaking from the export out of India of eligible articles or things, shall be allowed from the total income of the assessee.
Provided that where in computing the total income of the undertaking for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section
No deduction under this section shall be allowed to any undertaking for the assessment year beginning on the 1st day of April, 2010 and subsequent years.
1. CONDITIONS TO BE SATISFIED :
This section applies to any undertaking which fulfils all the following conditions, namely:-
1. it manufactures or produces the eligible articles or things without the use of imported raw materials;
2. it is not formed by the splitting up, or the reconstruction, of a business already in existence :
3. it is not formed by the transfer to a new business of machinery or plant previously used for any purpose.
4. 90% or more of its sales during the previous year relevant to the assessment year are by way of exports of the eligible articles or things;
5. it employs 20 or more workers during the previous year in the process of manufacture or production.
6. This section applies to the undertaking, if the sale proceeds of the eligible articles or things exported out of India are received in or brought into, India by the assessee in convertible foreign exchange, within a period of six months from the end of the previous year.
7. Audit : Deduction u/s 10BA is not available unless the assessee furnishes auditor’s report in Form No. 56H along with the Return of Income.
8. Deduction u/s 10A / 10B is not taken : where in computing the total income of the undertaking for any assessment year, deduction under section 10A or section 10B has been claimed, the undertaking shall not be entitled to the deduction under this section.
If the aforesaid conditions are satisfied , the deduction u/s 10B may be computed as under :
Profit of the Business of the undertaking X Export turnover
Total Turnover of the business
Following points should be noted :
1. “export turnover” means the consideration in respect of export by the undertaking of eligible articles or things received in, or brought into, India by the assessee in convertible foreign exchange in accordance with sub-section (3), but does not include…
- freight,
- telecommunication charges or
- insurance attributable to the delivery of the articles or things outside India.
2. The aforesaid profit is deductible for 6 Assessment Years , i.e. , assessment years 2004-05 to 2009-10.
3. Where a deduction is allowed under this section in computing the total income of the assessee, no deduction shall be allowed under any other section in respect of its export profits.
- “convertible foreign exchange”:
means foreign exchange which is for the time being treated by the Reserve Bank of India as convertible foreign exchange for the purposes of the Foreign Exchange Management Act, 1999 (42 of 1999), and any rules made thereunder or any other corresponding law for the time being in force;
- “eligible articles or things”
means all hand-made articles or things, which are of artistic value and which requires the use of wood as the main raw material;
shall not include any transaction by way of sale or otherwise, in a shop, emporium or any other establishment situate in India, not involving clearance of any customs station13 as defined in the Customs Act, 1962 (52 of 1962).] |
