New Delhi, Oct 6: Industry chambers today welcomed the inclusion of larger number of services for refund of service tax in respect of exports and provision to pay interest on Exchange Earners Foreign Currency (EEFC) balances as a means to offset the losses in the wake of appreciation of rupee.
Reacting on the government's steps to provide relief to the exporters export body FIEO president GK Gupta said payment of interest on the EEFC accounts was a long pending demand and will help the import intensive sectors where exporters keep money in EEFC to pay for imports.
He added the exporters who feel that rupee may loose some of its strength in near future may park their money in the account to benefit from the interest rate.
Industry chamber Assocham said ''exporters will be beneficiary of refund schemes on services and provision to pay interest on EEFC balances will also amount to their overall commercial interests.'' Meanwhile, Mr Gupta welcomed the extension of reduction in interest rate in export credit from December 31, 2007 to March 31, 2008 and inclusion of jute, carpets, cashew, coffee, tea, plastic and linoleum and de-oiled cakes in the package.
Assocham welcomed measures that government has agree to provide the requisite interest subvention of two per cent points to scheduled commercial banks for sectors such as textiles, readymade garments, leather products, handicrafts, besides engineering products, processed agriculture products, marine products and sports goods.
In a statement, the ASSOCHAM president Venugopal N Dhoot said that all these steps will yield results at appropriate time from rupee getting further appreciated and the impact of which will be felt very shortly.
However, Mr Gupta lamented on the continued exclusion of Pharma sector which is a sunrise industry with huge export potential.
Mr Gupta suggested to extend the package for one more year till December 31, 2008. On extension of service tax to general insurance, technical inspection and certification services and technical testing and analysis services, he observed that this will give limited relief to engineering, textiles and chemical sectors.
The main services like commission to foreign buyer, overseas travel, courier charges, charges to CHAs, which have impacted all exporters in substantial way, Mr Gupta said ''continue to be outside the ambit of remission.''