More sops on way for Re-hit exporters

NEW DELHI: There could be more sops on the cards for exporters battling the appreciating rupee. The commerce & industry ministry is preparing a Cabinet note for expanding coverage of refunds to exporters. Commerce & industry minister Kamal Nath said the ministry is looking at additional measures for refund and remission of taxes to exporters.

Speaking to the media before a review meeting to assess export performance of the plantation sector, Mr Nath said: "We are looking at measures for refund and remission of taxes to ensure that exporters get a level playing field." He added that the commerce department would hold an overall review meeting with all export promotion councils in November.

Mr Nath said he was still hopeful that India would meet the export target of $160 billion. The government had announced a Rs 1,400 crore package for exporters in July and later exempted seven items related to exports from service tax.

Meanwhile, the commerce department’s proposal that the import duty remission through the DEPB scheme should be replaced with the duty drawback scheme, provided certain state level taxes are refunded to exporters, is hanging in balance. While the revenue department has refused to refund the state taxes, the commerce department has decided to send the proposal to the Cabinet. Ministry officials said the Cabinet will take a final call on the issue.

The rupee has strengthened by about 10% since March this year, putting Indian exporters at a disadvantage vis-a-vis competitors in China, Pakistan and Bangladesh. Labour intensive sectors like leather, textile and handicraft have been hit the most.