EOUs seek extension of I-T sop

Export-oriented units (EOUs) have sought extension of the income-tax exemption under Section 10B of the Income-Tax Act beyond March 31, 2009.

The export promotion council for EOUs and SEZs has, in its budget proposals, sought extension of the tax holiday for 10 consecutive assessment years. Exports from EOUs were worth Rs.37,657 crore last year.

T Vasu, chairman of the Export Promotion Council for EOUs and SEZs, said supplies from domestic tariff areas to EOUs should be exempted from service tax too, as mentioned in the foreign trade policy.

At present, EOUs have to pay central sales tax (CST) and then take refund. This leads to blockage of funds, delay in reimbursement, extra administrative work and increase in transaction cost.

"The CST should be exempted ab-initio. This has already been done in the case of SEZ units. This does not have any revenue implication as the CST is in any case refunded," Vasu said.

Vasu also sought amendments in the foreign trade policy regarding procedure of Personal Carriage of Gems & Jewellery, duty free re-import of goods displayed at international exhibitions, sub-contracting abroad, import of goods by EOU and supply of services in domestic market against free foreign exchange.