The Union Government on Wednesday appealed to states to reimburse taxes collected from exports sector, a demand being raised by exporters in view of the appreciating rupee.

"I make an appeal to all Chief Minister right here... just as the Central Government reimburses every single tax collected from exports sector, state governments should also reimburse or return every single rupee of tax collected from exports sector," Finance Minister P Chidambaram said in his post-Budget interaction with industry chamber Ficci.

He expressed hope that state chief ministers would respond to his appeal. Chidambaram also asked Ficci and other associations to use their clout to appeal to chief ministers that not reimbursing taxes on exports is a short sighted approach. He admitted that he could not do more than appealing to states.

"If states collect taxes and still not reimburse them, what is it that I can do except to appeal to states that it is a short sighted approach? Can I compel a state to refund tax to you?" the Finance Minister asked.

To a query that the Centre should reimburse what the states have collected, he quipped that this would require rewriting of the Constitution.

To another query, Chidambaram said he would invite representatives of the textile industry and banks in a few days to work out a solution on the demand of the sector to put a one year moratorium on repayment of loans.

He said he did not mention this issue in his Budget speech since it is basically an administrative mechanism.