The finance ministry has announced exemption for exporters from services taxes by ports, railways and road transport. Many exporters have been hit badly due to recent downtrend in US dollar. The rupee value has appreciated recently and has hit the net profits of many companies.

The statement issued by Finance Ministry said, "Government has issued a notification providing refund of service tax paid by exporters on four taxable services, which are not in the nature of input services but could be linked to export goods."

The current service tax is at 12 per cent and there is an additional 3 per cent education cess. As per the current arrangement, the exporters get refund for service tax for their services and value addition.

Commerce and Industry Minister Kamal Nath had promised exporters on many occasions about the exemption from service taxes. The Finance Ministry was declining the earlier proposals from Commerce Ministry. After six months of discussion, an exemption has been made for the benefit of exporters. The Finance Ministry was declining the recommendations by saying that there are already many schemes like SEZ and STPI running which offer tax holidays to many companies.

While the exporters are already facing tough competition from China and many East European markets, this relief will not help much. The exporters have welcomed the decision of the Government.

There has been a rise of nearly 8% in Indian currency since the start of year. Finance Ministry had announced a package of Rs 1,400 crore for benefit of exporters in some selected sectors.