EOUs, SEZs seek clarification on ending discriminatory taxes

New Delhi, Feb. 24 The Export Promotion Council for EOUs and SEZs (EPCES) on Tuesday hailed the Government decision to end discriminatory tax treatment in respect of those exporters with a unit outside the SEZ as well as a unit in the SEZ, vis-À-vis those operating only in the SEZ. However, it sought a clarification through a circular from the revenue department.

In his reply to the Interim Budget in Parliament the Finance Minister, Mr Pranab Mukherjee, said “it has been decided to remove this anomaly through necessary changes in the Act”.

In a statement issued here, the Director General of the Council said after almost three years of operation of SEZ Act, this discrimination in tax treatment has been recognised by Parliament. However, he said, the SEZ units would still have to wait till an actual amendment is carried out.

Meanwhile, the Federation of Indian Export Organisation President, Mr A. Sakthivel, hailed the cut in service tax from 12 to 10 per cent, continuance of 4 per cent reduction in central excise duty beyond March 31, 2009 and cut in central excise duty on cement from 10 to 8 per cent. He said this would help boost domestic economy albeit on a limited basis. He said that cut in service tax rates would add to export competitiveness by about 0.25 per cent, as refund of service tax is a long drawn out process and only a few exporters obtain refunds while a majority of them wait for more than a year.