DGFT director general NL Lakhanpal said the scheme was being formulated to meet exporters' demand for reimbursement of the state sales tax they have to pay on the sale of exim scrips.

The centre had considered transferring exim scrips like advance licences, special import licence and the duty entitlement passbook scheme from the state sales tax list to the central one, but dropped the idea, he said.

"Yes, we were thinking of shifting these items into the central sales tax list, but now we are considering a separate scheme, where exporters will pay all the taxes and duties throughout the year and at the end of the fiscal these will be reimbursed against the submission of receipts," Lakhanpal said.

The new scheme will be distinct from existing ones like the duty entitlement passbook scheme and the duty drawback scheme, and an exporter using any of these schemes cannot apply for the new one.

Exporters had taken state governments to court over the imposition of sales tax on exim scrips. However, a Supreme Court judgment on May 1, 1996, upheld the sales tax.

Lakhanpal also said commerce ministry officials were collecting the feedback of exporters on the planned scheme, which might be announced by the year-end.

"At present, we are talking to different exporters, trade and industrial bodies to know their demands before finalising the new scheme. However, it will not be announced shortly, probably by the end of this year or in next year's policy," he said.

The West Bengal government, in its 1998-99 budget, slashed sales tax on exim scrips from 12 per cent to 4 per cent. Maharashtra levies 4 per cent and Gujarat 2 per cent.

Earlier, at a meeting at the Indian Chamber of Commerce here on Tuesday, Lakhanpal asked exporters to request their state governments to reduce the sales tax rates further.

Some exporters sought information on the new trade regime that is gradually coming into force under the World Trade Organisation. The free trade regime will come into full effect from 2003.

Lakhanpal said the commerce ministry would depute trained personnel at each of the 31 offices of the DGFT to reply to queries and help exporters with WTO-related matters.

"At present, all WTO guidelines are available on the Internet. However, for more interactive sessions, we will train our officers and depute one in each of our offices to guide and help exporters, whenever necessary against their global competitors," Lakhanpal said.