India Government Announces Export Tax Rebate Reduction

The government of India recently announced the reduction of the exporter's tax rebate rate, which is consistent with a substantial reduction in some imported products.

One official said the tax cut came into force in September 1st.

The list of new tax rates announced by the Ministry of Finance includes cotton, leather, bicycles and wooden products.

The new rebate rate for knitted blouses, shirts and slivers is 8.8% and man-made fiber is 10.5%.

The government also announced that the rebate rate of elastic yarn should be raised from 7.6% to 9%, and the rebate rate of elastic fabrics should be raised from 6.5% to 7.6%.

Similarly, the tax rebate rate for coffee, tea and optical fiber has also been raised.

The adjusted rate of cotton yarn (natural color) is 4%, and cotton yarn (dyeing) is adjusted at 5%, regardless of the thickness of the yarn.

The automatic tax refund application is now in 35 parts, covering about 85% of exports.

According to this system, the customs cargo loading permit can be used as a tax refund certificate.

In addition, a new trade formality procedure will be initiated. New exporters do not need to open accounts at designated ports in export ports.

The tax rebate is designed to neutralize export duties, central consumption tax and service tax.

In the 2008 to 09 years, the rupee depreciated sharply, and the strength of the US dollar improved the profits of exporters.

The Ministry of Finance set up a committee, led by Saumitra Chaudhuri, a member of the prime minister's economic advisory team, to decide the tax rebate rate.

After consulting with the multi industry, trade associations and other common interests bearers, the Committee submitted its report.

In 2008-09, the peak of collective import tariffs dropped from 34.13% last year to 31.7%.