New Delhi: Finance Minister Nirmala Sitharaman said on Saturday that a scheme for exporters will be launched this year to reimburse the taxes and duties paid by them. The aim, she said, is to boost the dwindling outward shipments from the country.
The scheme proposes to digitally refund exporters the duties and taxes levied at the Centre, state, and local levels, she said, while presenting the Union Budget for 2020-21. These taxes include the value added tax (VAT), electricity duties and fuel used for transportation, which are not getting exempted or refunded under any other existing mechanism.
The move assumes significance as merchandise export from India scheme (MEIS) was not in compliance with global trade rules. Under the World Trade Organisation (WTO) rules, certain duties like state taxes on power, oil, water, and education cess, are allowed to be refunded.
Sitharaman said that the Centres and state governments were attempting to develop each district as an export hub. Institutional mechanisms are being created for the purpose, she said. The country's exports shrunk for the fifth month in a row by 1.8 per cent in December 2019 to USD 27.36 billion.
Imports too declined by 8.83 per cent to USD 38.61 billion; bringing down the trade deficit to USD 11.25 billion during the month under review. The trade deficit during December 2018 was USD 14.49 billion. During April-December 2019-20, exports slipped 1.96 per cent to USD 239.29 billion and imports declined by 8.9 per cent to USD 357.39 billion, leaving a trade deficit of USD 118.10 billion.
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