The Hindu Business Line : EEPC wants monthly refunds for exporters under VAT regime

THE Engineering Export Promotion Council has expressed concern over the procedural delay exporters would face in obtaining refund of value-added-tax on export goods under the proposed VAT regime.

Addressing reporters here, the Council Chairman, Mr Rakesh Shah, said that the draft paper on the new tax regime to take effect in April indicates that exporters would have to wait nearly seven months before the VAT is paid back to them after exports.

This would mean that at least 4 per cent of the value of their purchases would be blocked for that period. This could prove a major disadvantage to exporters, most of whom are small-scale entrepreneurs. The Government would have to enable a monthly refund of VAT, he said.

If the industry were to double its exports in the next five years as envisaged by the Centre, infrastructure bottlenecks would have to be sorted out. Ports, roads and power situation were a major bottleneck, which added to the costs, he said.

The council has commissioned A.F. Ferguson & Co to put together a strategy paper to look at catalysing the export growth. Industry's strengths, market potentials, infrastructure requirements and procedural issues would some of the issue that the report would address, Mr Shah said.

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