Govt to scrap service tax on exports
The government today announced abolition of service tax on all exports and extended duty sops to SEZs.
By PTI |
NEW DELHI: The government today announced abolition of service tax on all exports, extended duty sops to special economic zones and included more farm items for incentives while setting a target of 160 billion dollars for merchandise exports during 2007-08.
Unveiling the Annual Supplement to Foreign Trade Policy 2004-09, Commerce and Industry Minister Kamal Nath said the export target of 125 billion dollars for 2006-07 has been met. He said ambitious goals of achieving 160 billion dollars in 2007-08 and 200 billion dollars in 2008-09 have been set.
"We have factored in the appreciation of rupee which keeps on fluctuating. We have already requested Reserve Bank of India to provide concessional loans to exporters," he said.
Nath said the government would meet leading export promotion organisations next week to devise a strategy to deal with the rupee appreciation.
The slowdown of the US economy has also been taken into account, he said, adding it would not have a major impact on exports as country's trade basket was quite wide.
Nath announced extending the popular Duty Entitlement Passbook (DEPB) scheme till March 2008. He said a new scheme to replace the existing one would be finalised by then.
The annual policy review met some long-pending demands such as exempting all exports, including those of services, from the service tax. Modalities of refund would be worked out by Commerce Ministry in consultation with Revenue Department.
Besides, more items have been included in 'Vishesh Krishi and Gram Udyog Yojana' for tax sops. The benefit will also be available to exporters of coconut oil, soyabean oil, potato flakes, meals and flours, cardamom and food preparations like soups, pasta, sauces and bakery products.
The government also proposed more duty incentives that would be applicable only for import of cold storage, pack houses and refrigerated vans for agro-processing units. This will be over and above the existing schemes.
Recognising Special Economic Zones as an engine of employment, investment and export growth, Nath announced that developers and co-developers of these zones would be now be entitled to all duty exemption and remission schemes.
Unveiling the Annual Supplement to Foreign Trade Policy 2004-09, Commerce and Industry Minister Kamal Nath said the export target of 125 billion dollars for 2006-07 has been met. He said ambitious goals of achieving 160 billion dollars in 2007-08 and 200 billion dollars in 2008-09 have been set.
"We have factored in the appreciation of rupee which keeps on fluctuating. We have already requested Reserve Bank of India to provide concessional loans to exporters," he said.
Nath said the government would meet leading export promotion organisations next week to devise a strategy to deal with the rupee appreciation.
The slowdown of the US economy has also been taken into account, he said, adding it would not have a major impact on exports as country's trade basket was quite wide.
Nath announced extending the popular Duty Entitlement Passbook (DEPB) scheme till March 2008. He said a new scheme to replace the existing one would be finalised by then.
ADVERTISEMENT
The annual policy review met some long-pending demands such as exempting all exports, including those of services, from the service tax. Modalities of refund would be worked out by Commerce Ministry in consultation with Revenue Department.
Besides, more items have been included in 'Vishesh Krishi and Gram Udyog Yojana' for tax sops. The benefit will also be available to exporters of coconut oil, soyabean oil, potato flakes, meals and flours, cardamom and food preparations like soups, pasta, sauces and bakery products.
The government also proposed more duty incentives that would be applicable only for import of cold storage, pack houses and refrigerated vans for agro-processing units. This will be over and above the existing schemes.
Recognising Special Economic Zones as an engine of employment, investment and export growth, Nath announced that developers and co-developers of these zones would be now be entitled to all duty exemption and remission schemes.
ADVERTISEMENT
"Ninety-two SEZs have been notified till date and 50 of these are at various stages of implementation. Over 18,000 direct jobs have already been created and it is expected as many 1.5 million jobs will be created in approved SEZs. In the 50 SEZs, investment of Rs 13,500 crore has come," he said.
Addressing another major demand, the government decided to allow duty credit under the DEPB scheme on customs duty and Special Additional Duty on fuel. "Since many of the units run on generators, this will benefit them," Nath said.
The Export Promotion Credit Guarantee Scheme (EPCG) has also been expanded to cover spares, tools and refractories for existing plant and machinery which may not have been imported under the scheme.
Allocation for Focus Product Scheme has been increased to Rs 1,000 crore from Rs 650 crore. Products like mica, barley, oats, soybean, cigar, bovine fats and copra have been included.
Similarly, the Focus Market Scheme has been enlarged to 16 more countries, including 10 former members of Commonwealth of Independent States.
Download
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.
Download
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
The Economic Times News App for Quarterly Results, Latest News in ITR, Business, Share Market, Live Sensex News & More.
ADVERTISEMENT
