New Delhi: The government proposes to give a sector-specific package for refund of taxes and levies to exporters hit by a sharp appreciation of the rupee, commerce and industry minister Kamal Nath said on 22 October.
Maintaining his optimism that India will achieve export target of $160 billion for 2007-08 despite currency related troubles, Nath said his ministry is preparing a Cabinet note for expanding coverage of refunds to exporters.
“We are looking at measures for refund and remission of taxes to ensure that exporters get a level playing field,” Nath told reporters before a review meeting to assess the export performance of the plantation sector.
The government had announced a Rs1,400-crore package for exporters in July and exempted seven items from service tax.
The minister said he would take an overall export review meeting with different export promotion councils next month.
However, not everybody shares Nath’s optimism on the exports front.
“Even $140 billion will be a tall order,” an official had said last week.
Besides, there are differences between the commerce ministry and the finance ministry. The revenue department has conveyed to the commerce ministry that it is not in favour of refunding state level taxes to exporters.
“It will be the Cabinet that will take the call,” the official said.
The rupee has strengthened by about 10% since March this year, putting Indian exporters at a disadvantage against competitors, especially those from China, whose currency has depreciated along the weakening of dollar.