Export oriented units (EOUs) have come under the lens of the Directorate of Revenue Intelligence. The DRI has written to the finance ministry to tighten the norms for these units.
According to sources, DRI were conducting a discrete enquiry for the past two years. They have recently written to the finance ministry raising the concern that many export oriented units are seeking duty drawback benefits.
Also Read: Exports to revive on US, Europe recovery: Gujarat Pipavav
If it is an EOU they are already getting income tax exemption under Section 10B of the Income Tax Act. Therefore, there is simply no question of them getting duty drawback benefits which other non-EOUs exporters are entitled to. In fact as per the estimates they have shared with the finance ministry they are saying that because of this the total hit on the exchequer will be Rs 100 crore but they feel that it could be two to three times more. They feel this can only be quantified correctly once the finance ministry is able to plug the loop hole.
Sources say it is the chief of the DIR, Najib Shah who wrote to the finance ministry earlier this month asking them to plug the loop hole, post which they are going to setup a committee in the finance ministry to re-look at a solution out of this. So, by later next month they will have something in place to tighten the norms.
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