Commerce and Industry Minister Arun Jaitley is expected to meet Finance Minister Jaswant Singh next week, seeking tax breaks for exporters.
Commerce ministry officials said the minister would seek tax breaks on export earnings -- a facility which had been withdrawn from April 1 -- and on sale proceeds from duty entitlement passbook scheme licences.
The development comes a day after exporters met Jaitley seeking the Reserve Bank of India's intervention in the forex market to check the appreciation of the rupee.
They had also demanded the opening of a dollar window from which banks could borrow dollars as and when approached by exporters for pre- and post-shipment credit in foreign exchange.
Exporters, represented by the Federation of Indian Export Organisations and Export Promotion Council, had also demanded a re-look at the restriction on hedging of deals.
Further a demand for the reimbursement of high transaction costs by the government was also put forward.
While ruling out the possibility of seeking an intervention by the government or the central bank on the issue, commerce ministry officials said the tax breaks would help exporters, who were complaining that margins were getting reduced by around 10 per cent.
The government has already reworked the exemption on taxing export realisations.
Earlier, the five-year phaseout plan envisaged tax on 20 per cent of export earnings in the first year, rising 20 per cent each to 100 per cent by the end of five years.
According to the new formula, exporters have to pay 20 per cent tax in the first year, thirty in the second, fifty in the third, seventy in the fourth and 100 in the fifth.
According to the present Income-Tax norms, exporters are required to pay taxes on their entire export earnings in 2004-05.
