Saturday, June 27, 2009

Exporters seek service tax waiver

NEW DELHI: Exporters, hit hard by the global economic slowdown, have sought exemption from payment of service tax in the forthcoming Union Budget.

In a meeting with the revenue department, exporters pointed out that while the government allows refund of taxes on a number of services, very little refund has actually taken place because of the cumbersome process involved.

According to Delhi Exporters' Association (DEA) president SP Agarwal, who led a delegation to meet revenue secretary PV Bhide earlier this week, the problem with refund of service tax is a long-pending issue for exporters.

"We are hardly getting any refunds. If the government wants us not to pay service tax, then we should get an exemption," Mr Agarwal said.

According to DEA, exporters are working on just 4-5% profit margins as demands have shrunk due to the global slowdown and it is very difficult for most to pay a 10.5% service tax.

He added that the revenue secretary has assured exporters that the government would take steps to solve the problem. "We are hopeful that the Budget would sort out the issue," he said.

The delegation also asked the government to exempt exporters from paying value-added tax (VAT) at the state level. DEA pointed out that while as per law the refund of VAT is to be made to exporters in one month, very little is being refunded within the given period. "There is also a provision for 8% interest on delayed refund, but not a single paisa has been paid so far," Mr Agarwal said.

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India to host Doha meeting in September: Commerce Minister Anand Sharma

PARIS: India plans to convene a meeting of key world trade ministers in September to capitalise on new momentum in global commerce talks, Indian Commerce and Industry Minister Anand Sharma said today.

"In early September we're looking at a ministerial meeting," Sharma told AFP on the sidelines of informal world trade talks in Paris taking place this week.

Sharma said the talks in Paris were "important enough to give confidence and hope that we can do business together," adding: "We've reaffirmed our commitment to take the Doha Round to a successful conclusion."

The United States and India have been at odds in the Doha round of trade liberalisation talks, which got under way in the Qatari capital in late 2001 and has been foundering ever since.

Progress has been hampered by disputes between developed and developing nations on measures to ease restrictions on trade in agricultural and industrial products.

Sharma today however pointed to "major changes" in both the United States and India following elections in the two countries in recent months.

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