Tax deadline relaxed

SME CHATROOM

rtnership firm does not pay service tax to government by the May 5 that would mean that an option to avail exemption has been exercised.  What is the threshold level of export performance for small and medium enterprises to get the status as export house?  Export house recognition is given to exporters who achieve a minimum of Rs 15 crore in the previous three years and the current year. The application for export house recognition has to be filed by March 1 of the licensing year.  For certain categories of exporters and exports, double weighting is given for the purpose of export house recognition, i.e. every rupee export is treated as equivalent to Rs 2 worth exports for the purpose of status recognition. The specified categories include :

Small-scale industries/tiny industries/cottage industries/units registered with KVIC or KVIB

Units exporting handlooms/handicrafts/hand knotted carpets/silk carpets

Exporters exporting to Latin American countries/CIS countries/sub-Saharan countries (listed in Appendix 9)

Units having ISO (series)/WHOGMP/HACCP/SEI CMM level II and above status (granted by agencies listed in Appendix 6)

Units located in North East/Sikkim/J & K

Exporters of agriculture products

Exporters of services

 Thus a small-scale industry having aggregate exports of even Rs 7.5 crore in the previous three years and current year can get recognition as one-star export house.  However, if there are no exports in any of the three previous years and the application is based only on the basis of current year performance, then status recognition will not be granted.  Para 3.5.2 of Foreign Trade Policy deals with the above dispensation.  Can a small scale industry be set up as a export oriented unit (EOU)?  As per Para 6.6 (d) of Foreign Trade Policy, only projects having a minimum investment of Rs. 1 crore in plant and machinery shall be considered for establishment as export oriented units under the EOU scheme.  This restriction will, however, not apply to existing export oriented units and units in the electronic hardware technology parks (EHTP), software technology parks (STP) and bio-technology parks (BTP) schemes.  Besides, units engaged in handicrafts, agriculture, floriculture, animal husbandry, information technology, services, brass hardware and handmade jewellery can also be allowed to set up export oriented units with less than Rs 1 crore investment in plant and machinery.  Also, the Board of Approvals may decide to allow any EOU to be set up with less than Rs. 1 crore investments in plant and machinery.  Has the government provided any relief for service providers affected by Mumbai rains?  The Member (Service Tax), Central Board of Excise and Customs has sent letter F. No. 341/32/2005-TRU dated 10th August 2005 to the Chief Commissioners of Central Excise at Mumbai, Nagpur, Pune, Ahmedabad and Vadodara.  In this letter the Member (ST) says that in view of the unprecedented rains and floods and consequent difficulties faced by the assessees in Maharashtra and Gujarat, for delayed payment of service tax due for the month of July 2005, paid on or before August 20, 2005, the authorities should take a lenient view under Section 80 and impose no penalty under section 76 of the Finance Act, 1994.  This facility may be provided only for assessees who discharge their full liability for payment of service tax for the month of July 2005 on or before August 20, 2005.  Is there any way for a small scale unit to import raw materials in bulk without duty payment for the purpose of export production?  Under Para 4.1.10 of Foreign Trade Policy all manufacturer exporters can obtain Annual Advance License upto 300 per cent of their previous year exports. Earlier only export houses could use AAL scheme. With effect from April 8, 2005, even small manufacturers exporters can obtain AAL.  Under the AAL scheme, it is not necessary to indicate how much quantity of an item will need to be imported duty-free and how much quantity will be exported in discharge of export obligation.  Only a proper account showing a utilisation of imported duty-free inputs in the manufacture of goods exported need be furnished after expiry of the export obligation period.