Benefit of section 80HHC for export of processed minerals--Clarification regarding export of cut and polished dimensional blocks, granite or other rocks - Income Tax - 693/1994

Benefit of section 80HHC for export of processed minerals--Clarification regarding export of cut and polished dimensional blocks, granite or other rocks Circular No. 693 Dated 17/11/1994 Section 80HHC of the Income-tax Act allows a deduction from the gross total income of the entire profits derived from export of goods other than minerals. Finance (No. 2) Act, 1991, extended the benefit to export of processed minerals and ores mentioned in the Twelfth Schedule to the Income-tax Act. Item (x) of the Schedule mention "cut and polished minerals and rocks including cut and polished granite". 2. Some organisations and individual taxpayers have raised doubts whether the deduction under section 80HHC is available in respect of export of granite or other rocks that are cut and exported as raw blocks after being washed and cleaned. 3. The entry in the Twelfth Schedule is very clear and unambiguous and uses the term "cut and polished". Therefore, for availing of the benefit under section 80HHC, it is necessary that the rock is not only cut into blocks but also polished before it is exported. This is in line with Government's policy to encourage export of polished granite and other rocks where value addition before export is high and to discourage export of raw blocks where value addition is low. (Sd.) D. P. Semwal, Under Secretary (TPL),