India proposes a new tax refund plan

The Indian government will notify the 2011-12 AIR (full industry tax rate) tax refund schedule in the short term. To this end, the government has formed a committee in January 2011 and is led by Mr. Shri Saumitra Chaudhuri, who is a member of the AIR Tax Relief Planning Committee.

In view of the government's decision to end the DEPB (tax authority registration) plan on September 30 this year, the commission has accepted commissions to advise on these traditional tax rebate rates for exports of goods under the DEPB program.

The DEPB program has been implemented since 1997 and currently covers 2,130 projects. To cover these products in a tax rebate program and assign an appropriate tax rebate rate is a challenge both in terms of product classification and tax rebate. Therefore, the total number of products for the tax rebate program is about 4,000, compared to 2,835 currently.

Broadly speaking, most of the existing tax rates already covered by the tax rebate program will be reduced slightly. The reduction was mainly due to the basic customs tax, crude oil was lowered from 5% to zero, and the central diesel consumption tax was lowered from Rs 4.40/liter to Rs 2.40/litre. In most industries, crude oil enters the product chain of a variety of products, as crude oil input, and diesel is also used to generate electricity for power plants.

In addition, the import tariffs on crepes have dropped from 30% to 5%. It has a negative impact on the tax rebate rate of the silk fabrics, silk garments and silk carpet industries, because these industries import silk yarn as the main production input. The downward adjustment is limited to 30%-50%. Although the rate of tax rebate reduction for most other products is small, with the aim of ensuring that the current tax rate is not lowered by more than 10%, the actual reduction is far greater than 10%, in order to minimize the difficulties faced by exporters. In some products, namely leather garments and leather bags, the tax rebate rate has actually been raised.