The- government is working on duty free scrips to offset various state-level taxes. This will boost the profitability of exporters. The levies include sales tax on petroleum products, CST, electricity duty, octroi, mandi fees, purchase tax, development tax and toll tax.

The commerce ministry is work¬ing towards replacing the duty en¬titlement pass book (DEPB) scheme and has also recommended that the education cess and similar levies be neutralised through the proposed duty-free scrips, which can be used by exporters to pay customs duty on imported inputs.

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"This means that exporters could save up to 4 per cent of the value of has made competition stiffer in the glo¬bal markets. The drawback scheme currently offers cash reimbursement to exporters for taxes paid by them to the centre, such as customs or excise," says ELCINA website.

Not only that, to facilitate reim¬bursement of state-level taxes, the commerce ministry is also contem¬plating reforms at the level of consti¬tutional amendment. Once the plan is ready, the DEPB scheme would be terminated and a new regime of duty-free scrips and drawback will come. in force as above-mentioned single-window facility. If everything goes as planned, the new system will be operational by mid of 2010. It will also eliminate the need of reimbursing state taxes separately.