India's new government is likely to announce its new Foreign Trade Policy in mid-2009, reported the Business Standard. The Commerce Ministry is preparing the new foreign trade policy and would associate it with Goods and Services Tax (GST) only after implementation of this indirect tax mechanism. The GST is expected to be implemented from April 01, 2010.
The United Progressive Alliance government unveiled on September 1, 2004 the current five-year foreign trade policy replacing the export-import policy. Though the policy expires on March 31, 2009, the Directorate General of Foreign Trade (DGFT) extended its tenure till a new policy was ready.
The foreign trade policy has many export promotion measures that reimburse indirect levies charged on exports and these levies are proposed to come under GST that would have only two slabs. Hence, the new export policy has to specify how current benefits passed on to exporters match proposed GST rates.
The DGFT started consultations with various export-related organizations and industry lobby groups on the new Foreign Trade Policy. The consultations would go on till April 20, and thereafter the suggestions would be put together and inter-ministerial consultations would start. The Commerce Ministry is getting ready for making recommendations to new government. However, officials maintained that the new government would take a call on whether the current policy would be continued.
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