Exporters need tax refunds on time, says DGFT

With the value added tax (VAT) to be implemented across the country shortly, the Centre has asked states to refund export houses on time so that they can be competitive in the world market.

Quality and price of goods matter the most in the rapidly changing world trade environment.

So if the states refund taxes to exporting companies' on time, they can retain market access and also be competitive, said K T Chacko, director general of foreign trade, chairing the Federation of Indian Export Organisation's (FIEO) open house on foreign trade policy here on Thursday.

Walter D'Souza, convener FIEO urged the Karnataka government to refund sales tax due to small and medium companies. With erratic refunds by the government, some companies are or on the verge of shutting shop. If released immediately, some of them could be revived.

To address the refund issue, the Karnataka government will hold talks with industry representatives and sales tax department by this month end for early refunds, said P G R Sindhia, minister for large and medium and small scale industries and infrastructure.

Allaying fears of DEPB removal, the director general said it will be replaced with a suitable trade friendly scheme. "The new scheme will address duty remission and to formulate guidelines, NCAER and Rajiv Gandhi Law Forum has been roped," he disclosed.

The commerce ministry is also planning to conduct a study on the employment quotient of exports.

"Once the study is complete, the finding will help both states and the centre to formulate trade and employment policies. The study will help both the governments to identify key areas and dish out incentives for creating the most number of jobs," he added.

Answering a number of queries on infrastructure bottlenecks in the country, Chacko said "the ministry is preparing plans to cut down bureaucracy and paper work for speedy clearance at ports and airports," he added.

Speaking on the occasion, T V Maruti, president, Silk Weavers Federation said recognising the track record maintained by a company, export house status on a par with EOUs should be accorded to them as incentives.