Projects Today reported that the commerce ministry is planning to introduce a 3 year extension of tax benefits to Export oriented Units in its bid to give an impetus to the export industry.

Under Section 10(B) of the Income Tax Act, EoUs do not need to pay tax on profits provided they fulfill some conditions, including exporting not less than 50% of their total production. This benefit will expire at the end of next fiscal 2009-10. Earlier the EoU tax benefits were scheduled to expire on March 31st 2009, but in 2008 Mr Kamal Nath Commerce Minister quoted the scheme would be extended till March 31st 2010.

However, if the proposal gets its way, it will benefit more than 2,700 companies operating within the EoUs like the Reliance Industries 33 million tonne per annum petroleum refinery in Jamnagar, Gujarat. The proposed extension will allow the EoUs to plan their expansion in a better manner which will eventually lead to additional manufacturing and exports.

As per report, the final decision on the proposal will probably be taken only after a new government takes over after the general election which is likely to take place after April 2009.

(Sourced from Projects Today)