Comments
The Export Promotion Council for Export Oriented Units and Special Economic Zones (EPCES) on Tuesday demanded that the Government should extend the tax holiday to EOUs by another five years in the forthcoming Union Budget.
An EPCES statement said the EOU sector needs further extension of Sunset Clause under section 10B of Income-Tax Act in the Union Budget 2011-12 as it needs to be nurtured for encouraging creation of further dedicated manufacturing activities for exports.
Mr Jatin R. Mehta, Chairman, EPCES, said the performance of the EOU scheme has started declining because as the scheme stands today, EOUs will not be able to avail themselves of income-tax exemption under section 10B of the I-Tax Act (for 10 years) for exports after March 31, 2011.
Exports from EOUs
Mr O.P. Kapoor, Deputy Director-General, EPCES, said exports from EOUs had grown from just Rs 9 crore in 1981-82 (the year of commencement of the EOU scheme) to Rs 1,71,498 crore in 2008-09.
However, it then plunged to Rs 83,700 crore in 2009-10 due to the exit of some prominent EOUs from the Scheme, including Reliance Industries Ltd, Jamnagar with an export turnover of Rs 70,000 crore, he said. The others include: Orient Crafts Ltd, Gurgaon (export turnover of Rs 274 crore in 2009-10 - in the process of exiting the Scheme), C.L. Gupta & Sons, Moradabad (export turnover of Rs 92.44 crore in 2009-10), Oswal Cotton & Spinning (export turnover of Rs 50 crore in 2006-07), Vardhman Group, Ludhiana (export turnover of Rs 200 crore in 2008-09), Nahar Spinning Mills, Rajasthan (export turnover of Rs 200 crore in 2004-05).
Jobs created
EOUs have given employment to 3,00,830 people and attracted investments worth Rs 77,284 crore, Mr Kapoor said, adding that EOUs have been contributing immensely in the last three decades in creating manufacturing capabilities, increasing exports, employment generation and value addition. Besides, EOUs are located in rural and semi-rural areas, thereby making a distinctive contribution to regional and sub-regional development, he said.
The Commerce and Industry Ministry has constituted a Committee under the chairmanship of Mr S.C. Panda, Development Commissioner, Noida SEZ, to review, revamp and remodel the EOU Scheme. The meetings of the Committee have been held at Bangalore and Chennai to take feedback from industry. The Committee will also meet shortly at Mumbai to take inputs from EOUs in Maharashtra.
Cut refund route
Pointing out that under the EOU scheme, EOUs are required to pay service tax and then claim refund, Mr Mehta said EOUs should be exempted from payment of service tax instead of claiming refund. This would reduce the procedural work of EOUs as well as of Central Excise authorities, he said.
EOUs should also be exempted from payment of VAT and CST instead of first paying and then claiming the refund, he added.
Besides, EOUs are required to take prior permission from central excise authorities for sending goods for job work, he said and suggested that EOUs should be allowed to send goods for job work with prior intimation to central excise authorities.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.