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Service Tax abolished on Exports

The Govt. of India in the new supplement to the Foreign Trade Policy announced exemption on service tax for exporters. DEPB scheme has also been extended till March 2008 & it is expected that by such time the new WTO compliant scheme will be formulated.

The MOC has also requested RBI to ensure cheaper credit to SMEs & Exporters. The commercial banks are required to extend 15% of total credit to EOUs out which Govt has advised RBI to ensure 50% of credit is given to SMEs.

The developer & the co-developer of SEZs will be entitled to benefit of duty exemptions, DEPB & other duty free import authorizations.

The modalities of refunds of service tax for exporters will be worked out jointly by MOC & Deptt of Revenue under the MOF.

The EPCG scheme (Export Promotion Capital Goods Scheme) has been amended to make it easy to administer. The tiny & cottage industry has been given concession to complete export obligation under this scheme in 12 years instead of 8 years to partly offset the burden of rising Indian rupee.

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