The Hindu Business Line : Assocham moots model for immediate VAT refund to exporters

CORPORATE India has pitched for a VAT refund model that will enable exporters to get their refunds immediately and not after three months as proposed under the current VAT design.

A study conducted by the Associated Chambers of commerce and industry of India (Assocham), at the behest of the Commerce Secretary, to suggest a simplified VAT refund model for exporters, has mooted an exemption certificate system that will allow exporters to purchase raw materials without payment of VAT.

"The best optimal simplified model will be one in which the exporter gets the refund immediately. As the product is leaving the country, the exporter should get back the refund of VAT that is embedded in the goods that are leaving, through an IT system without interface with the tax administration," the Assocham study said.

The study has now been submitted to the Department of Commerce.

It suggests that exporters be permitted to purchase local inputs against Form 49 or a similar form used earlier during the sales tax regime. Under the recommended system, an exporter will not be required to pay VAT to the selling vendor.

It also suggests that Form H may be used for inter-State purchases. In the earlier system, central sales tax was exempted on furnishing of Form H.

For the Assocham study, 79 exporters were surveyed in three States of Delhi, Haryana and Maharashtra. Of them, 32 belonged to the merchant category and the remaining 47 were manufacturer exporters. Although there is not much variation between the two groups of exporters, the survey highlighted that merchant exporters would be severely affected compared to manufacturers under the VAT regime.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page