Date:17/07/2004 URL: http://www.thehindubusinessline.com/2004/07/17/stories/2004071700780500.htm

Back Exporters want Centre to rebate input-stage VAT

Our Bureau

New Delhi , July 16

THE Federation of Indian Export Organisations (FIEO) has suggested that the Central Government should rebate all input-stage value added tax (VAT) that would be paid by the exporters in the manufacture of finished goods exported by them.

All States are expected to move to a VAT regime replacing the sales tax from April 1, 2005. Currently, most states do not neutralise or exempt the input-stage sales tax paid by exporters.

``We want the Centre to have a VAT component along with the excise and the customs components in the drawback schedule so that exporters can avail a single window system for getting refund of all taxes paid by them. The Centre and the States can then make appropriate adjustments between themselves,'' Mr Subhash Mittal, Vice-President, FIEO, told newspersons here.

He held that the Customs Department would be the most ideal department to provide such a `single-window' facility as the department has complete information over the export consignments.

Expressing disappointment that the Union Budget did not have any support measures for exporters, Mr Mittal held that more fiscal incentives are required for the exporting community if the country were to improve its share in the global trade. ``The Government must strengthen the exporters' hands to achieve more and not remain complacent over the growth numbers recorded in the recent years,'' he said.

A number of exporters, however, expressed scepticism over the willingness of the State Governments to sacrifice existing revenues, as the Centre would try to adjust the rebates (provided on input-stage VAT paid by the exporters) with the States.