Ambiguity over service tax waiver worries exporters

NEW DELHI: With the revenue and commerce departments locking horns over waiver of service tax on exports, the exporting community has expressed its dismay over the uncertainty surrounding the long-awaited relief announced in the foreign trade policy last week. Federation of Indian Export Organisations (FIEO) president Ganesh Kumar Gupta said that the FTP had tried to neutralise the incidence of service tax on post-production services both in India and abroad as well as input services for non-excisable sectors.

“We are baffled by contradictory reports appearing in the media quoting finance ministry officials stating that the waiver was announced unilaterally by the commerce ministry,” he said while addressing the media on Tuesday. Mr Gupta added that the neutralisation of service tax on exports was announced at a time when exporters were already reeling under the pressure generated by an appreciating rupee. “

The commerce minister must ensure that the announcements made by him are honoured by the finance ministry,” the FIEO chief said. Exporters have also criticised the government’s decision to exclude non-EDI (electronic data interface) ports from the purview of the focus product and focus market schemes.

The schemes, which have been designed to promote export of labour intensive products and new markets, would exclude the intended beneficiaries because of the exclusion, they claim. Exclusion of non-EDI ports would keep out the in-land container depots (ICDs) in Kanpur, Panipat and Moradabad which are the hubs for leather, handloom and brass artware from the ambit of the scheme.