Export oriented units get extension of I-T benefit
April, 14th 2008
Duty entitlement passbook scheme to continue for another year
A slew of measures to pep up export of traditional industries hit by the rupee appreciation, major spurs to cut down transaction costs, procedural simplification, extension of the popular duty neutralisation DEPB (Duty Entitlement Pass Book) scheme till May 2009 and also a one-year extension beyond March 2009 in income-tax benefit to 100 per cent export units are outlined in the annual supplement to Foreign Trade policy.
Releasing the final year supplement to the FTA (2004-09) here on Friday, the Union Commerce and Industry Minister, Mr Kamal Nath, announced an export target of $200 billion for the current fiscal, against $155 billion export performance achieved in 2007-08.
He said the achievement fell short by $5 billion due to the effect of an appreciating rupee by more than 12 per cent against the dollar in 2007. If trade in services were added, Indias commercial engagement with the world would be $525 billion, he said.
In order to achieve the export target, Mr Nath announced tax refunds and interest subsidies to a spate of export segments that are labour-intensive in nature such as marine products, leather, textiles and handicrafts and 5 per cent additional duty credit for export of toys and sports goods.
For agricultural products, additional duty credit of 2.5 per cent for export under Vishesk Krishi and Gram Udyog Yojana (VKGUY) is provided for export of certain flowers, vegetables and fruits.
In the Focus Market scheme, 10 more countries including Mongolia, Bosnia-Herzegovina, Albania, Croatia, Honduras, Sudan, Ghana, and Colombia were included.
Under the Industrial Park Scheme, it has now been decided to include IT, ITeS and R&D in natural science and engineering as industrial activities allowed in the parks, he said.
While the customs duty payable under Export Promotion Capital Goods (EPCG) Scheme has been cut from 5 per cent to 3 per cent, average export obligation under the scheme for premier trading houses would be calculated based on the average of the last 5 years export instead of the extant 3 years. Alongside, reduced average export obligation under EPCG for sectors that have seen decline in exports in the previous year is also announced.
Mr Nath also unveiled a plan , for value-added manufactured products and said the list of products would be notified shortly. The government would also set up an export promotion council for the telecom sector to augment its exports and would also set up hubs for auto parts, drugs, and petroleum and information technology.
The Minister also declared that the country hoped to take a five per cent share of global trade by 2020, a four-fold spurt in the next 12 years and a growth rate of 25 per cent consistently in the years ahead.
Other measures announced include treating of all electronic data interchange (EDI) ports as single port, reduction in application fee for duty credit scrips and EPCG authorisation, reduction of application fee for importer and exporter code and a joint task force to plan an integrated trade strategy to address structural problems of exporters.
EOUs would be allowed to pay excise duty on a monthly basis instead of consignment basis. To ensure that terminal excise duty and central sales tax refund is made on time, interest at 6 per cent a year is to be paid to the exporter where refund is not made within one month of the due date.