The Hindu Business Line : New DEPB rates will factor in tax incidence, DGFT assures exporters

Easing exporters' burden
The revenue department was now looking at an effective refund mechanism for certain specific services related to exports.
The annual tinkering with the FTB was essentially being done to lessen the burden on exporters.

Kolkata , April 14

The new Duty Entitlement Passbook Scheme (DEPB) rates, set to be announced soon, will factor in the un-rebated taxes (such as service tax, octroi, and entry tax) suffered by exporters.

The exporting community for long has been pleading that service tax and FBT and even the electricity charges, adding to the cost advantages suffered by exporters, should also be factored in while fixing the DEPB rates.

Addressing exporters of the eastern region at an open house organised jointly by EEPC, FIEO (ER), Capexil and the Bengal National Chamber of Commerce on the recently announced 2006 annual supplement to the Foreign Trade Policy here on Friday, Mr K.T. Chacko, Director-General of Foreign Trade (DGFT), said there would, however, be no change in the value cap, as the revenue department is of the firm view that no further outgo on DEPB would be allowed.

Responding to exporters' plea on speedier service tax refunds, the DGFT said the revenue department was now looking at an effective refund mechanism for certain specific services related to exports, and which will be beneficial to all exporters.

Admitting that the entire burden of tax incidence on exporters cannot be done away with in one go, at least not until we move to a GST system of taxation when all other taxes would go away, Mr Chacko clarified that the annual tinkering with the FTB was essentially being done to lessen the burden on exporters.

On the new product focus and market focus schemes, brought in to replace the target plus scheme, with effect from April 1, Mr Chacko said the credit was freely transferable and can be used for inputs or capital goods etc.

The products (that will qualify) and the markets are yet to be announced. The claims will have to be made six monthly, portwise.

Inter-Ministerial meet

On exporters' fears over implementation problems at the ground level, after policy changes have been announced, he said an inter-ministerial meeting was being scheduled in May to try and eliminate all the operational problems.

Responding to fears expressed over VAT calculations, he said DGFT will take up the issue with the State Governments concerned. A few rounds of discussions have already been held on the subject, he added.