Retrospective taxing of profits from DEPB licence sales is inequitable

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: news is that it has a caveat according to which, exporters with annual export turnover of Rs 10 crore or less would not be required to pay tax on profits, as they would be entitled to the benefit of 80HHC without having to meet any conditions. Therefore, most small companies will be out of its gambit.

Second, as I understand, there is no proposal to scrap DEPB this year. Nevertheless, the government’s move to extract tax retrospectively whether from small or large companies, is inherently inequitable if seen from the point of justice. The ITC case has already established a regretful precedence where the government had issued an Ordinance in its bid to negate the Supreme Court ruling in favour of ITC. The present case also highlights the arrogance and arbitrary powers of the state.

We keep hearing that a fixed amount of bank credit is earmarked for SSIs under priority sector lending. What is the share for SSIs? Are there more sectors for which the government has fixed a target for banks?

—Udyami Jagriti Foundation, Jaipur,

As per RBI’s guidelines, banks are required to ensure disbursement of specific percentage of their net bank credit to certain sectors. The policy is known as priority sector lending.

Currently, the target for Indian banks (both public and private sector) is 40% and for foreign banks in India, it is 32%. Broadly the sectors covered are: agriculture, small- scale industries and small businesses including retail, transport operators, professional and self-employed persons, education loans, housing and micro-credit, among others.

Sub-targets are also assigned under both categories for a few sub-sectors. For Indian banks, the sub-target for agriculture is 18% but there’s no target for foreign banks. And, although there are no sub-targets for SSIs and export credit for Indian banks, these are specified for foreign banks at 10% and 12%, respectively.