Revenue dept pitches for closure of export promotion schemes

DEEPSHIKHA SIKARWAR

TIMES NEWS NETWORK[ MONDAY, NOVEMBER 20, 2006 02:19:14 AM]

NEW DELHI: With special economic zones (SEZs) expected to create a
massive Rs 26,000 crore crater in government revenues in ’07-08, other
export promotion schemes should be prepared to bear the brunt in Budget
’07. The revenue department is likely to push for winding up of other
export promotion schemes.

Currently, the government has close to 11 export-incentive and promotion
schemes including SEZs.Finance minister P Chidambaram has already made
it clear that there was a need to review tax exemptions. Mr Chidambaram,
who has indicated evolving a moderate tax structure ahead of next
Budget, has made it contingent to slashing of sops.

In fact, parliamentarians, cutting across party lines, favoured pruning
of sops for SEZs at the meeting of consultative committee attached to
the finance ministry. While the revenue department subscribes to the
view that duties and taxes should not be exported, it wants the commerce
ministry to clear the maze. The plethora of export promotion schemes,
excluding SEZs, cost the exchequer a whopping Rs 34,430 crore in ’05-06.

Besides being a costly affair for the exchequer, having a large number
of export promotion schemes also poses problems in implementation,
increasing chances of misuse. With the revenue department holding this
view, it is likely that all the existing schemes may be rolled into one.
According to revenue department sources, for neutralising the duties, a
single scheme with more scientific criterion should be brought in place
to prevent any misuse as also to make the implementation easier.

Currently, the schemes aimed at promoting exports in various ways
include the duty entitlement passbook scheme, drawback, export promotion
capital goods scheme, duty-free import authorisation, advance licence,
export-oriented units, Software Technology Park of India and Vishesh
Krishi Upaj Yojana.

http://economictimes.indiatimes.com/articleshow/482208.cms