CALCUTTA, March 9: The Union government is planning to issue a tradeable and encashable bond to be issued against the payment of excise and customs duties and a fast track scheme to refund all input level taxes to exporters.Sources in the Union ministry of commerce said the proposal has come from the director general of foreign trade N L Lakhanpal as a means of boosting exports.
According to the sources, the bond will have the same status as a special import licence or a duty-free entitlement passbook scheme which exporters can sell after paying sales tax.
Lakhanpal said these schemes are being discussed in the directorate, but nothing concrete has emerged as yet. "We are trying to work out all sorts of measures to find out ways of helping the exporters. These two schemes were also in our discussions. However, I must add that they are still in a thinking stage and nothing has been finalised yet," he said.
"The idea has been formulated by Lakhanpal himself. The bonds will be issued by the Unionministry of commerce to exporters after they pay the necessary customs and excise duties for the imports needed for manufacturing the export item. These bonds can later be traded or even encashed," the sources said.
According to them, the DGFT is also planning a scheme where all input level taxes paid by exporters for their imported inputs will be refunded within 48 hours of export. "These taxes will include the customs, excise, sales tax and octroi, wherever charged. Even the interests on the locked-up finances on the duties paid is likely to be refunded through this scheme," they said.
Sources in the export promotion councils said the 48-hour scheme will not materialise due to differences between the Union ministry of finance and commerce."The commerce ministry always try to give some extra of incentive to the exporters and the finance ministry is always on the lookout to check revenue leakage. These two contradictory stands will certainly not allow the scheme to be successful," they said.
However,Lakhanpal feels that a solution can be worked out. "I agree that these two ministries have different standpoints but in an organisation you always find ways to get maximum returns from the resources available to you," he said.
The DGFT has already sought the exporters' views on these schemes. The responses have been "generally favourable", Lakhanpal said.
