Govt To Review Deemed Exports Scheme.

The deemed export scheme available to suppliers of products to specified projects is under review with the commerce ministry setting up a committee. The committee headed by Director General for Foreign Trade Anup K Pujari will review the very existence of the scheme whose scope has considerably widened over the years, among other things.

Deemed exports refer to transactions in which goods supplied do not leave the country, and payment for such supplies is received either in Indian rupees or foreign exchange. Supply of goods to export-oriented units, software technology parks or to projects financed by multilateral agencies and to power projects and refineries are treated as deemed exports at present. The benefits include those available under export promotion schemes.

The six-member panel has been tasked to revisit deemed exports issue and see if it "properly reflects government priorities" , an order announcing the panel's constitution said. The committee, set up last Monday , includes representatives from the finance ministry , Reserve Bank of India, Planning Commission and the revenue department.

In addition, the committee has been asked to rework the scheme in a way that it is not open to multiple interpretations. The review of the deemed export scheme comes when the government is trying to check leakages so that a scheme is not open to misuse.

For several years, the finance ministry has been pushing for lowering the concessions and tightening the provisions to check misuse. Various export promotion schemes are estimated to have resulted in the government foregoing revenue of the order of Rs 54,000 crore, though the share of the deemed exports scheme was low.

Source : timesofindia.indiatimes.com