Mat Withdrawn, Tax Breaks For Eous

The Union budget for 1997-98 has also allowed export-oriented units (EoUs), electronic hardware technology parks (EHTPs) and electronic hardware units in export processing zones (EPZs) to sell 50 per cent of the value of their produce in any 12-month period in the domestic market. This sale can be made on payment of excise duty equivalent to full customs duty including the additional customs duty.

The finance minister has also decided to extend the benefit of deemed exports to the oil, gas and power sectors, if the supplies are made under the procedure of international competitive bidding. This benefit, already available to fertiliser plants, had been included in the amendments to the 1992-97 export import (Exim) policy in April 1996, but was subject to a notification by the finance ministry and was given on a case-to-case basis.

 

The budget has also extended the scope of the Export Earners Foreign Currency account by allowing them to use the money to open offices abroad and meet expenses and also to make investments from the account in joint ventures abroad up to $15 million, without reference to the Reserve Bank of India (RBI).

Clarifying that this will include manufacturer exporters, trading companies, EoUs and export processing zones units, commerce minister B B Ramaiah said the budget had taken exporters' concerns into account. Hardware and electronics goods exporters will also gain, as will software exporters, who will get full customs duty exemption, he added.

Federation of Indian Export Organisations president P K Shah welcomed the exemption from MAT and reduction in customs duty. Welcoming the enhancement permitted on domestic tariff area (DTA) sales to electronic hardware export-oriented units and EPZ units, Confederation of Export Units president R Veeramani expressed disappointment at the failure of the budget to extend this to other sectors.