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No.CLE/POL/CIRCULAR
/2007
Oct.16,2007
Members
of the Council.
Sub
: Relief Measures
announced by Government of India to exporters
Dear
Member,
As
you are kindly aware, the Government of India had earlier announced
a package of relief measures to the exporters on account of the
losses suffered by the exporters due to steep appreciation of Indian
Rupee against overseas currencies in the past 8-9 months. The relief
measures included upward revision of the DEPB Rates uniformly for
leather and leather products by 3%, reduction of the interest
rates on pre-shipment and post-shipment Rupee Export Credit by 2%
for the period Apr. 1- Dec. 31,2007 for Leather Products and 10%
reduction in ECGC Premium on Coverage Charges.
The
Government of India has now announced a series of relief measures to
the exporters, the details of which are given below.
1 Service Tax Exemption on Certain Specified Services
The
Department of Revenue, Ministry of Finance, Government of India has
issued a Service Tax Notification No.41/2007-Service Tax dated
Oct.6,2007 (copy enclosed). As per the said Notification, the
Service Tax exemption has been granted on the following services,
subject to fulfillment of conditions as specified in the
Notification.
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Sr.
No.
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Taxable
Services
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Classification
under Finance Act, 1994
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Description
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(1)
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(2)
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(3)
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1.
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Section
65(105)(d)
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Services
provided to an exporter by an insurer, including a
re-insurer carrying on general insurance business in
relation to insurance of said goods
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2.
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Section
65(105)(zn)
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Services
to any person, by a port or any person authorised by the
port, in relation to port services, in any manner;
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3.
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Section
65(105)(zzh)
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Services
provided by a technical testing and analysis agency in
relation to technical testing and analysis of said goods
where such technical testing and analysis is required to be
undertaken as per the written agreement between the exporter
and the buyer of the said goods
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4.
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Section
65(105)(zzi)
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Services
provided by an inspection and certification agency in
relation to inspection and certification of export goods
where such technical inspection and certification is
required to be undertaken as per written agreement between
the exporter and the buyer of the export goods
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5.
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Section
65(105)(zzl)
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Services
to any person, by other port or any person authorised by
that port in relation to port services, in any manner;
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6.
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Section
65(105)(zzp)
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Services
provided for transport of said goods from the inland
container depot to the port of export
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7.
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Section
65(105)(zzzp)
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Services
provided for transport of said goods from the inland
container depot to the port of export
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Members
may note that the exemption of Service Tax will have to be claimed
by the exporter in the prescribed form on quarterly basis for
consideration of refund. This Service Tax refund facility will be
applicable only if no CENVAT credit of service tax paid on
exempted Services is availed and if the goods have been exported
without availing drawback of service tax paid on exempted services.
2 Extension of 2% interest reduction on Rupee Export Credit
upto March 31,2008
The
Reserve Bank of India (RBI) vide Notification dated July 13,2007
announced 2% reduction in interest rates on pre-shipment and
post-shipment credit for the period Apr. 1 – Dec. 31, 2007 to
exporters of certain products including Leather Products. The RBI
has now issued a notification dated Oct. 6, 2007 (copy enclosed)
extending this benefit to exporters of various products including
leather products upto March 31,2008.
3 Permission of interest earning on EEFC account
As
members are aware, Exchange Earner’s Foreign Currency (EEFC)
accounts are currently permitted to be maintained in the form of
non-interest bearing current accounts.
The
RBI has issued a Notification dated Oct. 6,2007 through which
exporters maintaining EEFC accounts are permitted to earn interest
on EEFC account to the extent of outstanding balances of US $ 1
million per exporter. Members may note that this is a temporary
measure valid upto Oct. 31, 2008.
Accordingly, It
will now be possible for account holders to maintain outstanding
balances to the extent of US $ 1 million in the form of term
deposits up to one year maturing on or before 31st October 2008.
The rate of interest will be determined by the banks themselves.
Member
exporters are hereby requested to make use of the above benefits
announced by the Government of India.
With
regards,
Dr.
K. Elangovan
Executive
Director
COUNCIL
FOR LEATHER EXPORTS
Notifications/Circulars
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