The Hindu Business Line : EOUs highlight problems to DGFT

THE Export Promotion Council for EOUs and SEZ Units (EPCES) has impressed upon the Government the need for bolstering the EOUs which would export Rs 33,753 crore worth of goods this year. A delegation of EPCES under the Chairmanship of Mr Sharad Jaipuria met the Director General of Foreign Trade (DGFT), Mr. K.T.Chacko, in this regard.

When the DGFT said the Prime Minister's Economic Advisory Council has not accepted the income-tax benefit continuation beyond March 2009, Mr. Jaipuria said that the matter should be taken up the Commerce Ministry with the Finance Ministry.

The EPCES Director-General, Mr L.B. Singhal, said the EOUs suffer high transaction cost because of procedural hassles and he singled out three issues i.e., exemption to EOUs from Central sales tax, service tax and zero rating of VAT for supply of goods to EOUs/SEZ units.

In all these cases, the EOUs have to first pay taxes and then take refund from three different agencies. As such EOUs should be provided ab initio exemption from all these three levies and stated that this has got no revenue implications as they are refunded by the Central Government.

EPCES also emphasised that at the time of next annual supplement to the foreign trade policy, other corking procedural issues encountered by EOUs must be simplified. These include repeated registration of EOUs with customs authorities, prescribing time schedule for various activities to be performed by the Development Commissioners and the Central excise authorities.

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