It has been decided to give an interim relief to the sectors of tents and canvas, electric machinery, carpets, rugs and mats, sports goods, footwear, surgical/medical/veterinary/ beauty care instruments, cutlery, onyx products, electric fans, furniture, auto parts, handicrafts, jewellery and pharmaceuticals. All incentives will be linked to the outcomes, efficiency standards and wherever possible, productivity targets. The government has zero-rated all kinds of exports to provide incentives to the manufactures-cum-exporters under the new trade policy.
The zero rating of exports is a very old demand of the industry. Despite many promises by the governments, the exporters have not been getting this facility as enjoyed by their international competitors. The government has now decided to make the exports completely zero-rated.
Under the new trade policy, rationalisation of tariff would be done on the principle of cascading to provide the exporting industry with an environment, which supports manufacturing rather than trading. The new policy would also rationalise the tariff policy keeping in view the structure of value-addition in various industries.
When contacted, tax experts said that there was no such tax on exports, which were already zero-rated. There might be possibility of allowing 100 percent duties and taxes-free inputs/raw materials consumed in the finished products being exported or some other type of additional incentives to the said export sectors, they added.