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Govt considering removal of Service tax, fringe benefit tax
June, 19th 2009

Removal of Fringe Benefit Tax and service tax exemption for exporters in the Budget are under active consideration of the Finance Ministry, a highly placed official said.

Commerce Secretary Rahul Khullar met Finance Secretary Ashok Chawla on Thursday and is believed to have pressed for several fiscal incentives for exporters, who are suffering due to the ongoing recession in major markets.

India's exports have been contracting for the last seven months in a row, costing millions of jobs in labour oriented sectors like gems and jewellery and textiles, industry estimates suggest. In 2008-09, exports grew by a meagre 3.4 per cent to USD 168.7 billion.

Khullar met Chawla a day after he had a meeting with a delegation of the Federation of Indian Export Organisations.

The exporters have been demanding removal of the FBT on the ground that the business promotion expenses should not be treated as fringe benefits and should not be taxed.

 
 
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