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Sector-specific package for exporters on cards: Nath
October, 22nd 2007
Government proposes to give a sector-specific package for refund of taxes and levies to exporters hit by a sharp rise in rupee value, Commerce and Industry Minister Kamal Nath said on Monday.

Maintaining his optimism that India will achieve export target of $160 billion for 2007-08 despite currency related troubles, Nath said his ministry is preparing a Cabinet note for expanding coverage of refunds to exporters.

"We are looking at measures for refund and remission of taxes to ensure that exporters get a level playing field," Nath told reporters before a review meeting to assess the export performance of the plantation sector here.

The government had announced a Rs 1,400-crore package for exporters in July and exempted seven items from service tax.

He expressed the hope that the export target would be met, "just as targets were met in the previous years". Nath said he would take an overall export review meeting with different export promotion councils in November.

Though Nath is hopeful of reaching the export target of $160 billion, his optimism is not shared by senior officials in the ministry.

"Even 140 billion will be a tall order," an official had said last week.

Besides, there are differences between the Commerce Ministry and the Finance Ministry. The Revenue Department has conveyed to the Commerce Ministry that it is not in favour of refunding the state level taxes to the exporters.

"It will be the Cabinet which will take the call," the official said.

Rupee has strengthened by about 10 per cent since March this year, putting Indian exporters at a disadvantage against competitors, especially China, whose currency has depreciated along the weakening of dollar.
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