Government today expanded the scope of service tax refund paid to exporters and increased the number of sectors eligible for reduced interest rates on pre-shipment and post-shipment credit to provide much-needed relief to businesses against an unabated rise in rupee.Exporters would now be given a refund of taxes paid on seven services, instead of four allowed earlier. The new services to be included in the scheme are general insurance, technical testing and analysis, and inspection and certification.
The Centre had last month announced exempting services rendered by ports, road transport and railways from the purview of tax.
It has also allowed payment of interest on an amount up to a maximum of one million dollars kept in Exchange Earners Foreign Currency accounts. The rate of interest, however, will be decided by the banks and the measure would be valid up to October 31, 2008.
Besides, "such accounts should be in the form of term deposits, with a maturity of one year," the Finance Ministry said in a statement.
The measures would partially provide relief to exporters, whose margins have been hit by the rising rupee, which has appreciated to a record high of 39.36 to a dollar, highest since March 1998.
The list of sectors eligible for reduced interest of 4.5 per cent minus the benchmark prime lending rate on pre and post-shipment credit has also been expanded to 12.
Source: Agencies
The Centre had last month announced exempting services rendered by ports, road transport and railways from the purview of tax.
It has also allowed payment of interest on an amount up to a maximum of one million dollars kept in Exchange Earners Foreign Currency accounts. The rate of interest, however, will be decided by the banks and the measure would be valid up to October 31, 2008.
Besides, "such accounts should be in the form of term deposits, with a maturity of one year," the Finance Ministry said in a statement.
The measures would partially provide relief to exporters, whose margins have been hit by the rising rupee, which has appreciated to a record high of 39.36 to a dollar, highest since March 1998.
The list of sectors eligible for reduced interest of 4.5 per cent minus the benchmark prime lending rate on pre and post-shipment credit has also been expanded to 12.
Source: Agencies
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