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FIEO seeks redressal of exporters' grievances

By Our Special Correspondent

NEW DELHI, JAN. 21. The President of the Federation of Indian Export Organisations (FIEO), O. P. Garg, has appealed to the Finance Minister to urgently address the issue of levy of income tax on profits from sale of DEPB (duty entitlement passbook) as it is a major cause of concern for exporters operating under the DEPB scheme.

He has pointed out that the income tax authorities have been issuing notices even for old cases.

The DEPB was introduced in 1997 as a replacement of the value-based advance licensing scheme, and the erstwhile passbook scheme.

Till the assessment year 2001-02, Mr. Garg said, exporters had been allowed to treat income out of DEPB as `exempted income' under Section 28 (iiia) in their annual return. But the recent decision of the CBDT (Central Board of Direct Taxes) to treat DEPB income as a taxable income for computation of tax liability, he said, was badly affecting the competitive strength of Indian merchandise exporters and therefore, needed to be withdrawn.

In addition, the FIEO chief has called for suitable clarification from the CBDT to remove the ambiguity about deduction under Sec. 80-HHC (3) of export incentives of assessees who have otherwise suffered loss from export business.

In this regard, Mr. Garg has suggested that guidelines from the CBDT in line with the `letter and spirit' of Sec. 80-HHC need to be issued, and the Prime Minister's assurance that old cases will not be re-opened and tax on DEPB applicable prospectively will be implemented.

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