The Commerce Ministry has been advocating neutralizing the entire Service Tax paid by the exporters. The Government should therefore, provide complete exemption to exporters from payment of service tax on all services including banking charges, couriers services, commission to foreign agents, foreign traveling expenses and participating in overseas trade fairs, charges to CHA's and Advertising Service charges, etc.
GEA would therefore again request the Government to exempt exporters from the payment of Service Tax on all export related services so that exporters need not pay the Service Tax and then claim refund so as to avoid unnecessary paper work and procedural delays in availing the benefit.
The Government may find certain technical hitches in granting the exemption to Exporters as requested above so it is highly recommended by the GEA that the service tax should be factored into the drawback claims made by exporters and the drawback rates should be increased by 5%.
This would eliminate unnecessary paper work and enable the exporters to concentrate on using their energies to compete with our neighbouring countries like China, Pakistan, Bangladesh etc. who have not been affected by appreciation of their currencies and hence are eating into our orders from foreign buyers with a cascading effect of reducing employment in our factories.
Garments Exporters Association
marketing@alchempro.com
