The Hindu Business Line : Textile body reiterates need for tax refund to exporters

New Delhi, Dec. 21 The Confederation of Indian Textile Industry (CITI) has suggested that the four per cent additional customs duty collected by the Central Government on imports may be used for financing refund of State-level duties to exporters.

“We welcome the recent statements by both the Finance Minister and the Minister of Commerce and Industry on the need to refund State-level duties to exporters. However, the delay in establishing a mechanism for the refunds given the extent of the inter-State transactions involved, reimbursement of such duties by State Governments will not be practicable,” Mr P.D. Patodia, Chairman of CITI, said in a release.

Recently, the Finance Minister, Mr P. Chidambaram, urged all State Governments to ensure that their taxes do not burden external trade. The Finance Minister’s request comes in the wake of serious concern over a dip in India’s merchandise exports as the result of a double-digit appreciation in the value of the rupee to a dollar.

He added that duty-free scrips that can be redeemed for payment of customs duties can be provided to exporters towards State duties.

State of the EOU

Referring to the plight of export oriented units (EOUs) in the sector, Mr Patodia pointed out that the relief measures announced by Government through draw back and DEPB rates are not available to them since EOUs are equally affected by the rupee appreciation problems.

Referring to the increase in interest rates, CITI Chairman observed that some relief has been provided by Government to exporters by way of subvention of interest rates on packing credit. “However, units selling in the domestic market, which are also affected seriously by the present crisis in this industry, are left in the lurch,” he added.

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