Restore benefits under 80 HHC: FIEO Chief
FIEO President Mr. Ganesh Kumar Gupta has demanded reintroduction of income tax exemption under Section 80HCC and continuation of Section 10B of the Income Tax Act for at least another three years. He said this while spelling out the Federation’s expectations from the forthcoming budget during a pre-budget discussion organized by CNBC-TV 18 at Bangalore on 18th February.
Adding to his demands, FIEO Chief strongly pitched for withdrawal of fringe benefit tax levied on promotional expenses borne by exporters during their visits abroad. On the issue of various tax exemptions granted to exporters, he demanded that exporters should get complete refund of these taxes on time.
Explaining the adverse impact of stronger rupee on exports, Mr. Gupta called for stable fiscal policies and measures to mitigate the impact. He suggested that 0.25% of India’s total export earnings should be earmarked for Market Development Assistance through EPCs to help small and medium exporters.
Terming inadequate infrastructure as the biggest constrain faced by Indian exporters, FIEO President said that the target spending on infrastructure should be doubled, especially on roads, power and ports. He said: "The Global Competitiveness Report 2007-08 ranks India at 48th position among 131 countries, 5 ranks below the previous year’s ranking. This implies that infrastructure and procedural problems have accentuated over the last one year."
Referring to a study by the Federation putting cost disability of India’s exports in the range of 19 to 22%, Mr. Gupta said, unrebated taxes and duties, high cost of credit, high cost of inland transport and electricity cost besides ground level transaction cost are all accountable for such high cost disabilities suffered by Indian exporters. He said the Government should compensate the exporters by way of exemption from all service taxes and other levies, especially when they are reeling under stronger rupee.
Speaking further, FIEO Chief threw some light on poor infrastructure and high transaction coats faced by the exporters situated in hinterlands and said that the Government must take their problems on a priority basis to encourage employment in semi-urban and rural areas.
Executive Director of Gokaldas Exports, Mr. Rajendra Hinduja expressed concern over the inordinate delay in refund of taxes to exporters. He demanded for an increase in duty drawback rates to 6% from the present 4% so that exporters could partially overcome the impact of rising rupee. With respect to 100% EOUs, he said, the units are bring pushed to the wall as their tax exemptions are about to expire in 2009. "100% EOU scheme is one of the most successful schemes of Foreign Trade Policy, which has created employment in backward areas, and the units should not be forced to close due to change in focus of the Government," he said.
Mr. Ravi Vishwanathan, CFO, Sun Micro Systems said that while bigger software companies had managed the impact of stronger rupee to certain extent, smaller units were facing survival threats and the forthcoming budget must rescue the small and medium exporters.
Stating that the infrastructure sector could attract more investments provided the restrictive norms of sources like external commercial borrowings is relaxed, Mr. A. Subba Rao, CFO, GMR Infrastructure, called for accountability in those government departments which are implementing infrastructure projects.
Mr. Namashivayam, Executive Director, PriceWaterCoopers Ltd., said that given the high domestic interest rate, infrastructure companies should be granted the freedom to raise finance from cheaper sources without any hindrance. He further said that there is a need for closer co-ordination between the Ministry of Commerce and the Ministry of Finance, saying both have divergent views on export related issues.
 |
|
From left, Mr. Harsha Subramaniam, Dy. News Editor, CNBC; Mr. Ganesh Kumar Gupta, President, FIEO; Mr. Rajendra Hinduja, Executive Director, Gokaldas Exports; and Mr. Ravi Vishwanath, CFO, Sun Micro Systems. |
