Reply: The tariff structure has been simplified considerably in recent years. However, this is an on going process.
4) Measures Affecting Production and Trade
i) Incentives
Argentina 13:
13. In paragraph 177, the Report indicates that in 2009 a new section (35AD) was introduced in the Income Tax Act 1961, which provides investment linked deduction of 100% of capital expenditure to sectors such as cold chain facilities, agricultural warehousing, cross country natural gas and oil pipeline networks, and hotels, hospitals and slum rehabilitation sectors.
Please clarify whether foreign investment also benefit from this incentive.
Reply: Companies registered in India are eligible for exemption under Section 35AD of the Income Tax Act 1961. Details of the FDI policy of the Government are available at website www.dipp.nic.in.
Argentina 14:
14. In paragraph 181, the report indicates that the Government of India allocates funds to subsidize interest rates, particularly for exporters.
Please provide information about these subsidies, especially the amount and the sectors concerned.
Reply: The Benchmark Prime Lending Rate (BPLR) System was replaced by the Base Rate System with effect from 1 July 2010. Banks may choose any benchmark/methodology to arrive at the base rate that may be disclosed transparently. Banks may determine their actual lending rates on loans and advances with reference to the base rate and by including such other customer specific charges as considered appropriate. Accordingly, under the Base Rate System interest rates applicable for all tenors of fresh/renewed rupee export credit advances are at or above base rate.
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