Centre to rectify anomaly in I-T levy under DEPB plan

NEWDELHI: Prime Minister Manmohan Singh on Tuesday assured a delegation of exporters that the income tax levy on sale proceeds under duty entitlement pass book scheme will not apply with retrospective effect.

He said instructions will be issued immediately to rectify anomalies in the I-T Act to ensure prospective application of the levy. The anomaly had hit small and medium-sized exporters.

Almost 75% of exporters have small to medium-sized business and opt for DEPB scheme, unlike large exporters who prefer the drawback scheme. They had complained that they were being harassed by I-T authorities to pay dues on their earnings with retrospective effect.

The tax authorities had also threatened the exporters that their cases would be reopened to recover dues, the delegation of exporters told the PM in a memorandum.

In the past, textiles minister Shankar Sinh Vagela and commerce minister Kamal Nath had assured exporters that the matter would be sorted, but since the revenue department was required to give approvals, the matter will take some time.

The delegation comprising representatives of Federation of Indian Export Organisation, Apparel Export Promotion Council, Indian Silk Export Promotion Council, Silk Garments Exporters Association and Silk Exporters Association was led by Lok Sabha MP K Francis George.

They wanted the government to amend Section 28(iii)(a) of the Income Tax Act to incorporate the words, “The Foreign Trade (Development and Regulation) Act of 1992� in place of “Import and Export Act of 1947�.

The exporters said this was not done when the government amended the said Section, which had led to confusion and consequent denial of exemptions under Section 80HHC.