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ASSOCHAM Calls For Income Tax Exemption For Indian Exports

by Mary Swire, Tax-News.com, Hong Kong

16 April 2013


The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has called for export income to be made exempt from income tax, arguing that extraordinary steps are needed if the country hopes to reduce the size of its current account deficit.

Citing "the gravity of the situation," ASSOCHAM has warned that the current account deficit level of 6.7% of gross domestic product (GDP) is unsustainable. Merchandise exports fell by 4% during the April 2012-February 2013 period, causing further concern.

ASSOCHAM's solution is the total exemption of export income from income tax for at least three years, or until merchandise export levels reach USD500bn. Export levels for the first eleven months stood at USD266bn.

According to a statement from ASSOCHAM, "It should become a national endeavor to ensure that exports grow by leaps and bounds. That is possible only when selling in the exports markets becomes much more attractive. In the present global trade scenario the only way the exports business becomes more attractive than the domestic market would be through tax exemption."

TAGS: compliance | tax | business | tax compliance | India | tax incentives | gross domestic product (GDP) | tax rates | tax reform | trade

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