Financial Daily from THE HINDU group of publications
Wednesday, Mar 15, 2006
Financial Daily from THE HINDU group of publications Wednesday, Mar 15, 2006 |
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Industry & Economy - Foreign Trade Call for level field for exporters on tax refund Our Bureau
The agenda The main agenda of today's meeting was to suggest an "actionable agenda" to maximise exports through industry-specific and product-specific measures that could be incorporated in the Annual Supplement to the Foreign Trade Policy (FTP).
ALL FOR TRADE: Mr Kamal Nath, Minister for Commerce & Industry, flanked by Mr Jairam Ramesh, Minister of State for Commerce & Industry, and Mr Kumar Mangalam Birla, Chairman of the Board of Trade, at the board's meeting in the Capital on Tuesday. — Kamal Narang
New Delhi , March 14 The 39-member Board of Trade (BoT) has made a case for a mechanism to provide prompt refund of taxes and levies collected from exporters, stating that a level-playing field was necessary for Indian industry to be globally competitive. Apart from suggesting the continuation of the duty entitlement passbook (DEPB) scheme for one more year, the Board has also suggested to the Government that there should be zero duty under the export promotion capital goods (EPCG) scheme for all sectors. The Board also felt that the Budget move to levy 4 per cent countervailing duty on all imports would be a burden for merchant exporters and manufacturers producing non-excisable products, as there would be no scope for them to claim cenvat credit. "There was a unanimous demand that taxes and levies should not be exported. One of the main suggestions was to find a mechanism whereby taxes and levies that are collected are refunded without delay. "It was felt that neutralisation was not a concession and delay in refunding the taxes was a sort of refund tax," Mr Kamal Nath, the Commerce and Industry Minister, told newspersons after the BoT meeting. The main agenda of today's meeting was to suggest an "actionable agenda" to maximise exports through industry-specific and product-specific measures that could be incorporated in the Annual Supplement to the Foreign Trade Policy (FTP). Industrialist Mr Kumarmangalam Birla, who chaired the meeting, said that one of the roles of the BoT was to provide inputs to the Government for the FTP. Mr Birla said that the discussions at today's meeting revolved around the 80-odd suggestions made by the five working groups and four study groups under the BoT as well as inputs received from the commodity boards. Asked as to what would happen to the DEPB scheme, Mr Kamal Nath said, "We will take this to the Cabinet soon." On the issue of rebating the service tax paid by exporters, Mr Kamal Nath said that although there was an intent on the part of the Government to do so, an administrative mechanism had to be worked out on how it can be implemented. "There are three categories on which services tax may be applicable — input services, output services and post-manufacturing services. We have to take a decision on what to rebate and by how much," he said. Indications are that the Government may initially look at rebating only the service tax paid on output services. At the meeting, there was also a demand for sensitising the State Governments to ensure an export-friendly policy environment. Meanwhile, an official release said Mr Kamal Nath, would release a Compendium on Foreign Direct Investment (FDI) guidelines on the occasion of the announcement of the Annual Supplement to the FTP on March 30, in order to underscore the mutual supportiveness of trade and investment.
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