Industry & Economy
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Taxation
FIEO flays VAT refund clause
Our Bureau
Kolkata
,
Jan. 21
THE Federation of Indian Export Organisations (FIEO) has strongly opposed the VAT provision stipulating a refund for exporters within a period of three months.
Talking to Business Line from his Delhi office, Dr R.K. Dhawan, Chairman of FIEO, Northern Region, said the procedures for such refunds could be extremely cumbersome, time-consuming and will necessarily result in delays. He said Haryana has introduced VAT more than a year ago, "and exporters are still struggling to get the refunds."
There is something called "zero-rated sale" in State VAT which means in certain sales which are zero-rated, tax is not payable on the final product in certain specified circumstances. In such cases, credit will be available on the inputs. In other words, in the case of export sales, though ST is not payable, credit of tax paid on inputs will be available.
Dr Dhawan said waiting for refunds would be financially damaging for exporters as they have to block substantial amount of tax over payments towards vital inputs. Stressing on the absolute importance of a computerised VAT information system right from start, he said data on both the taxes paid on inputs and volume of exports was a must. "Therefore, EDI (electronic data interchange) connectivity should be ensured."
Dr Dhawan said till such time that this information exchange is put in place there was a need to provide an exemption route to exporters while allowing them to use the standard H Form instead of the usual C Form. If exemption can be given to SEZ units and 100 per cent EOUs, domestic units should also be given exemption from paying input stage VAT, he pointed out.
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