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Excise Duty Refund 4 June, 2010 - The government of India (GoI) has agreed to refund Nu1.28B to Bhutan as excise duty refund for manufactured goods Bhutan imported from India in 2007.
The agreement was signed yesterday evening between the director of department of revenue and customs, Choyzang Tashi, and the director general of inspection and central excise of India, HK Sharan. The refund for the year 2007 was an increase of about Nu 200M. In 2006, the refund was Nu 1.07B and not Nu 2B as reported earlier.
Explaining the backlog, a DRC official said processing the refund is a long and tedious process as lots of documents have to be compiled. “However, documentation has improved a lot and, in the next few years, it’ll be up to date,” said the official.
Director Choyzang Tashi explained that the excise duty composition is arrived mainly from the documentation when Bhutanese imports manufactured goods from India. “The amount of excise duty imposed on a particular commodity is captured from the invoice of the commodity imported,” he said.
A 100 percent refund is made if a commodity is purchased from the manufacturer or the factory. For goods imported from the open market or dealers, the two verifying teams have reached a 60 percent 40 percent formula, where 40 percent is knocked off for goods purchased from the open market, like in Jaigaon or Siliguri.
Excise duty is levied from four percent to 16 percent on various manufactured goods.
Director Choyzang Tashi said the excise duty refund is a special arrangement between the two governments under the free trade agreement. Normally excise duty is levied on finished products produced in that country, he said. “But since we don’t produce many goods, the government of India has given this as a gesture of our good relations,” said the director. “We don’t have many manufacturers and industries to boost our revenue base. Therefore, to broaden our revenue base, the government of India, as a help, gives this (refund) to us.”
Asked if the government would consider the private sector’s request of refunding the private sector, the director said that the excise duty refund, according to the trade agreement was a government-to-government arrangement. “The agreement says that excise duty will be refunded by the government of India to the government of Bhutan. It doesn’t say excise duty will be refunded from GoI to individuals,” he said. “It’s purely at the government level and the private sector is not eligible to this claim. If we start refunding the private sector, we’ll have to refund every individual who import goods from India.”
The finance secretary, Lham Dorji, who presided over the signing, thanked GoI and the central excise department for the support to the national revenue. “The revenue from the refund is a substantial component of our revenue. Sometimes it even goes up to 9 percent of the domestic total revenue,” said the secretary.
Source :- kuenselonline.com
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