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Tuesday, October 10, 2006

More tax exemptions to herbal product industry

At a time when the export of senna and herbals products from the Tuticorin region faces a stiff global competition in terms of price and quality, exporters here feel that the industry should be given more tax exemptions to help them augment exports multifold.

According to industry sources, the Tuticorin region comprising Tuticorin and near-by districts currently export about Rs.120 crore worth of senna and other herbal products per annum.

Raja Sankaralingam, treasurer of Tuticorin Senna Exporters' Association (TSEA) and former Secretary-General of All India Chamber of Commerce and Industry, says, "The Government should exempt the all type of services availed in the course of export and manufacturing of herbal commodities, from the purview of service tax."

Presently, the exporters have to pay service tax on various inputs, which were used in the manufacturing and export marketing chains.

It included levy of service tax on fumigation service, inspection service, forwarding fee, terminal handling charge, lorry hire, and courier charges.

"The service tax imposed on these input services increases the cost of exportable items and makes the herbal products from the region less competitive and unattractive in the international arena," Mr Sankaralingam says.

Moreover, the exporters feel that sales tax exemption given to senna leaves and pods under the Tamil Nadu Sales Tax Act should be extended to senna

stems, senna powder and other plant parts of senna too, considering the fact that large number of farmers in the region solely depend on senna cultivation.

On the quality front, the TSEA wants the Shellac and Forests Products Export Promotion Council under the Union Ministry of Commerce to set up a sophisticated laboratory in Tuticorin.

Owing to lack of testing facilities, the exporters in the belt are now forced to test their produce at labs situated as far as in Chennai, Kochi and Bangalore, which was both time consuming and expensive.

Source: The Hindu

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