EXPORTERS IN DISTRESS WITH CENTRE’S PROPOSAL
The Centre proposes to request the state governments to increase the Value Added Tax(VAT) rate from 4% to 5%. This proposal has made a section of exporters a bit nervy who missed out on VAT refunds from several state governments.
The Centre, however, plans to compensate states in view of the forthcoming reduction in central sales tax (CST) rates from 3% to 2%, which is scheduled to take place from 2008-09. Though all states have agreed to refund VAT payments to exporters on a quarterly basis. The reports till date, discloses that apart from Andhra Pradesh, Gujarat, Tamil Nadu, Punjab and Maharasthra, non-payment of VAT refunds to exporters remains an acute problem in most states, especially in West Bengal and Orissa.
Based on the turnover of exports that have been despatched from the state from April 2005 to November 2007, they claim engineering goods exporters from the state have deposited around Rs 230-240 crore each year toward VAT payment, but did not get a single rupee as refund against the payment of local tax.
The same problem is being faced by other exporters from the state.
The hike in the minimum VAT rate will hurt exporters in those states where VAT refund remains unpaid since the tax was levied. It will also block more working capital funds of these exporters.
So, if the Centre raises the VAT entry rate, then the VAT due to exporters must also be refunded
Or else, the Centre should reimburse the tax to exporters by withholding the central plan allocations of the erring states, suggested EEPC.
Exporter's in distress with centre's proposal
Last updated: 05 February 2008
Follow on
Google News
News posted by
CCI News Desk
Finance news reporter covering taxation, GST, income tax, business compliance, and economy updates. I simplify complex financial topics into easy-to-understand articles for professionals, taxpayers, and business owners on leading finance and tax platforms.
Click here to Login and post comments OR
Recent News :
- CBDT Enables Foreign Assets Reporting in AIS: Taxpayers Can Now View CRS/FATCA Data Online
- RBI Enhances Fintech Oversight with SRO Framework, AI-Based Fraud Detection and Cyber Safety Measures
- UPI Crosses 55.49 Crore Users in June 2026; FY26 Transactions Hit Rs 314 Lakh Crore
- CBDT Notifies NaBFID 10-Year Zero Coupon Bond Under Income Tax Act, 2025
- ICAI Issues Public Warning After Repeated Attempts to Gain Unauthorized Access to Its Digital Systems
- Core Industries Index Overhauled with 2022-23 Base Year and Expanded Industry Coverage
- MCA Warns Stakeholders Against Fake Calls, WhatsApp Messages and Phishing Scams
- ICAI Inaugurates Global Summit 2026 to Strengthen India's Leadership in Global Capability Centres
- Social Protection Fund Notified as Specified Person Under IT Act 2025 for Tax-Exempt Investments in India
- Centre Revises Excise Duty Rates on Petrol and Diesel Components; Changes Effective from 16th July 2026
Popular News
- CBDT Notifies NaBFID 10-Year Zero Coupon Bond Under Income Tax Act, 2025
- CBDT Notifies TDS Exemption for Specified Payments to IFSC Units Under Income Tax Act 2025
- CBDT Notifies Cost Inflation Index (CII) for FY 2026-27 Under Income Tax Act, 2025
- MCA Extends CCFS-2026 Deadline to 31st August 2026 Amid Data Centre Restoration
- PFMS Users Can Now Authenticate Using PAN or Bank Account Under Revised Aadhaar Rules
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
