Exporters peeved over I-T's DEPB claims

The Prime Minister has given an assurance to exporters that the income-tax levy on sale proceeds under the Duty Entitlement Passbook (DEPB) scheme will not apply with retrospective effect.

According to a press release issued by the All India exporters Grievances Forum, even as the prime minister has given the assurance and the case is sub-judice, the Income-Tax department is serving notices and seizing bank accounts.

Exporters feel that this has been an effect of wrongful interpretation of Section 80 HHC of the Income-Tax Act. According to Section 80 HHC, exporters will have to pay tax on DEPB with retrospective effect.

The release said that if the department is allowed to have their way, more than 5,000 small export-oriented units will become bankrupt, the nation will loose more than Rs 30,000 crore that it currently earns from export earnings and lakhs will become unemployed.

The income-tax department has already collected more than Rs 200 crore and they claim that more than Rs 2000 crore has to be collected, it said.

Meanwhile, organisations such as FIEO, CHEMEXCIL, DMAI, SRTEPC, CIAE, FATIMA, EEPC, AEPC and many more export councils and federations have come together to support the exporters and representative from export councils have formed an "All Indian Exporters Grievances Forum" to fight the cause.

The exporters have further threatened that if all this continues , a lot of exporters are planning to shift base to an overseas location.

They feel that economies such as Dubai offer single-window clearance, zero income-tax, time zone benefits, excellent infrastructure among others.