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The Government reimburses or refunds the taxes, duties, etc., that might have been suffered by the goods exported by the exporters.

MUMBAI, March 6

EXPORTERS can now hope to receive income-tax refunds much faster as the Income-Tax Department is geared to remit funds directly to the assessees' bank accounts electronically.

Electronic transfer of IT refunds directly to assessees' bank accounts — provided the requisite details are given to the department — is one of the direct tax highlights announced by the Finance Minister, Mr Jaswant Singh, in his Budget speech.

Acknowledging the assessees' right to receiving refunds at the earliest, Mr S.K. Bharadwaj, Chief Commissioner of Income-Tax, said the department was taking steps to resolve the issue.

Mr Bharadwaj was addressing a meeting organised by the FIEO-WR (Federation of Indian Export Organisations) to voice the exporting community's grievances on the application of Section 80HHC, which deals with premium and rebate available to exporters under the Income-Tax Act.

The Government reimburses or refunds the taxes, duties, etc., that might have been suffered by the goods exported by the exporters. The reimbursement/ refund and/ or exemption varies with the scheme in vogue such as advance licence, replenishment licence, duty drawback, cash compensation scheme (CCS), duty entitlement pass book scheme (DEPB) and duty free replenishment certificate (DFRC).

According to the Chairman, FIEO (WR), Mr G.K. Gupta, the use of different terms has created a lot of confusion in the minds of I-T officials.

Schemes were being interpreted differently to the detriment of the exporters, he said.

Citing the case of DEPB, Mr Gupta said the benefit was given to lower the cost, which gets inflated on account of the addition of taxes. However, profit from export business was being calculated exclusive of these benefits. As such, if a company showed negative profit (without consideration of these benefits), it was denied benefits under 80HHC.

While Mr Gupta sought a clarification that was binding on all the parties concerned, Mr Bharadwaj advised the exporters to make a presentation on the issue before the Central Board of Direct Taxes (CBDT).

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