The Government proposes to give a sector-specific package for refund of taxes and levies to exporters hit by the sharp rise in the rupee, commerce and industry minister Kamal Nath said on Monday. Maintaining his optimism that India will achieve its export target of $160 billion for 2007-08 despite currency related troubles, Nath said his ministry is preparing a Cabinet note for expanding coverage of refunds to exporters. “We are looking at measures for refund and remission of taxes to ensure that exporters get a level playing field,” Nath said. There are, however, differences between the Commerce and Finance ministries on the issue. The Revenue Department has conveyed to the Commerce Ministry that it is not in favour of refunding state level taxes to exporters. “It will be the Cabinet which will take the call,” said an official. The Government had announced a Rs 1,400 crore package for exporters in July and exempted seven items from service tax. Nath expressed the hope that the export target would be met “just as targets were met in the previous years”. He said he would take an overall export review meeting with different export promotion councils in November.The rupee has strengthened by about 10 per cent since March this year, putting Indian exporters at a disadvantage against competitors, especially China, whose currency has depreciated along with the weakening of dollar.
