EEPC wants quicker VAT refunds

Engineering Export Promotion Council (EEPC) has urged the West Bengal government for faster value added tax (VAT) return mechanism, as in spite of the state government's assurance, many exporters were yet to get their claims.

In the last two years Rs 33 crore would be pending as VAT returns with the state government, for about 52 odd companies, said Rakesh Shah, chairman, Engineering Export Promotion Council (EEPC).

The money lying with the tax authorities had eroded up to 30 per cent of working capital in many cases, Shah added. In his last budget speech, Asim Dasgupta, finance minister, West Bengal, had announced amendments in the West Bengal Value Added Tax Rules, 2005 whereby 50 per cent of the admissible amount of input tax will be refunded to the exporters, after scrutiny of the returns, within one month of receiving application. The balance amount would be refunded, after verification of the returns, within five months thereafter, the minister had said. In addition, Indian exporters were in a fix due to the falling rupee value against dollar in recent days, even though a depreciating rupee generally entails higher profits for them, Shah said.

While smaller export firms are benefiting from the currency depreciation, many large exporters are feeling the pinch as they had hedged rupee heavily against dollar in the months of May, June and July, when rupee was less than 40 per dollar mark, touching nine-year high against the USD.