Nath all set to unwrap exporter gift pack today

NEW DELHI: Commerce and industry minister Kamal Nath is likely to announce a special package for exporters in the foreign trade policy to be  announced on Thursday.



The package, aimed at bringing down the cost of operation for exporters hit badly by the global slowdown, will consist of measures such as dilution of export obligations, simplification of rules on service tax refunds and lowering of demurrage charges. 



The government looks to reduce bureaucratic delays, relax terms for claiming incentives and ensure timely refunds of input duties, said an official who asked not to be named. 



While most of the steps will be non-fiscal in nature, they may include direct sops for exporting products such as textiles and leather affected most by the recession in the US and Europe, the largest market for these items. 



The scheme could be on the lines of the existing ‘focus product’ and ‘focus market’ schemes where incentives are given for exporting niche products to new markets. “The commerce department has pushed hard for the scheme. It all depends on whether the finance ministry agrees to give additional funds,” the official said. 



A set of measures to dilute the export obligation against duty free import of machinery and raw materials under schemes such as the export promotion capital goods scheme are on the cards. The government may announce lower export obligations and more time to meet them. 



The policy will also include measures to simplify procedures for service tax refund to exporters and ensure fast disbursals. Very few exporters have been able to claim service tax refunds because of the complicated procedures. The finance ministry will also relax certain procedures for claiming refund of taxes on input services used in exports, another government official said. 



Exporters will be able to claim refund as and when they export, as against the current practice of quarterly refunds. Instead of documentary proof of actual use of inputs, exporters may be allowed to give statement of expenses certified by charteredaccountants. In some cases, exporters may also be allowed to give self-declarations. 



Another major incentive that exporters could expect is the delinking of grant of benefit under the duty entitlement pass book (DEPB), a popular import duty reimbursement scheme for exporters, with the realisation of export proceeds. Since the global finance crunch is delaying payments, the government does not see any merit in holding back DEPB payments to exporters, the official said. 



The global slowdown and the resultant reluctance of the industry to import have also prompted the government to consider revalidating the expired licences for duty free import of capital goods. The commerce and industry minister is also expected to ask the tariff authority of major ports to lower its demurrage charges, as there are delays in shipping out consignments due to overall slowdown in demand.