The Hindu Business Line : ‘States must relieve exporters of tax burden’

Tackling rupee: The Deputy Chairman of Planning Commission, Mr Montek Singh Ahluwalia, and the Union Finance Minister, Mr P. Chidambaram, at the 54th National Development Council meeting in the Capital on Wednesday. - Kamal Narang

Our Bureau

New Delhi, Dec 19 The Finance Minister, Mr P. Chidambaram, on Wednesday admitted that exports are under “some stress” due to the rapid appreciation of the rupee against a “weak dollar”.

In his intervention at the National Development Council meeting here today, Mr Chidambaram also made a case for the State Governments to refund or rebate various taxes including value added tax (VAT), octroi and electricity duty borne by the exporters.

“Any State which relieves exporters of tax burdens stands to gain: more export-oriented industries will locate in that State. Hence, it is in the long-term interest of the State to rebate or refund all taxes on exports,” Mr Chidambaram said.

The Finance Minister highlighted that regardless of the exchange rate or any other external circumstances it was an universally accepted principle that taxes must not be exported.

“The Central Government rebates or refunds every tax that is payable or paid and is attributable to goods and services that are exported. I submit that State Governments must do the same,” Mr Chidambaram said.

He expressed hope that the packages announced by the Government would bring some measure of relief to exporters.

Mr Chidambaram also urged States to continue with their efforts to mobilise resources and improve the efficiency of their expenditure for development purposes even as he cautioned them against becoming complacent on the back of their successful fiscal consolidation achievements.

More Stories on : Taxation | States | Exports & Imports

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