Interviews
GEA expects relief to export sector from Union Budget
15 Feb '11
4 min read
Garments Exporters Association - GEA, an apex body of garments exporters has called for an overall reduction in interest rates and corporate tax rates, besides removal of anomalies in excise and custom duties to reverse the recent slowdown in garment export industry.
As the international market, which was already highly competitive, has become more tough, GEA in its Pre-Budget recommendations has requested the Government to reduce the transaction cost and grant necessary fiscal and commercial relief for the garment sector of the Textile Industry to enable it to face increasing international competition.
According to Mr Rakesh Vaid, President, GEA the basic objective of the budget should be to make exports competitive as well as profitable, as the rising raw material prices have been adversely affecting the export potential of garment exporters. Garments Exporters are looking for some fiscal relief from the forthcoming Budget Proposals to help them to overcome the present crisis.
Mr Vaid expressed the hope that the following GEA Pre-Budget recommendations would receive favourable consideration of the Hon'ble Union Finance Minister while finalizing the Budget proposals:-
• To hike duty drawback rates by 5 per cent by increasing the scope and coverage of duty drawback scheme so as to ensure full reimbursement of excise duties, custom duties, service tax, education cess and various state level taxes.
• To provide adequate and need-based funds to exporters at reasonable rates of interest which should not exceed 7 per cent as applicable to agriculture sector and restore 4 per cent interest rate subvention on export credit.
• To restore 100% exemption to export earnings under Section 80 HHC of Income Tax Act atleast for the next five years.
• In view of acute power shortage, Government should encourage captive power generation by providing diesel at International prices and exempted from Excise Duty and Local Levies.
• To exempt from Service Tax all the export related services to avoid blockage of capital of exporters, as the procedure for refund is time-consuming, resulting in unnecessary delays and harassment.
• GEA would like the Government to implement GST (Goods & Service Tax), at the earliest and also to clarify how the GST mechanism will work for the exporters which are now enjoying various tax reimbursement such as duty drawback, advance authorization and advance licenses etc.
• The Custom duty on import of textiles machinery, accessories and fabrics should be abolished allowing free import at nil rate.
• Import duty on manmade fibres to be reduced to zero, so that the garment exporters can get cheaper man made fabrics available in the country for manufacture and export garments at more competitive prices.
As the international market, which was already highly competitive, has become more tough, GEA in its Pre-Budget recommendations has requested the Government to reduce the transaction cost and grant necessary fiscal and commercial relief for the garment sector of the Textile Industry to enable it to face increasing international competition.
According to Mr Rakesh Vaid, President, GEA the basic objective of the budget should be to make exports competitive as well as profitable, as the rising raw material prices have been adversely affecting the export potential of garment exporters. Garments Exporters are looking for some fiscal relief from the forthcoming Budget Proposals to help them to overcome the present crisis.
Mr Vaid expressed the hope that the following GEA Pre-Budget recommendations would receive favourable consideration of the Hon'ble Union Finance Minister while finalizing the Budget proposals:-
• To hike duty drawback rates by 5 per cent by increasing the scope and coverage of duty drawback scheme so as to ensure full reimbursement of excise duties, custom duties, service tax, education cess and various state level taxes.
• To provide adequate and need-based funds to exporters at reasonable rates of interest which should not exceed 7 per cent as applicable to agriculture sector and restore 4 per cent interest rate subvention on export credit.
• To restore 100% exemption to export earnings under Section 80 HHC of Income Tax Act atleast for the next five years.
• In view of acute power shortage, Government should encourage captive power generation by providing diesel at International prices and exempted from Excise Duty and Local Levies.
• To exempt from Service Tax all the export related services to avoid blockage of capital of exporters, as the procedure for refund is time-consuming, resulting in unnecessary delays and harassment.
• GEA would like the Government to implement GST (Goods & Service Tax), at the earliest and also to clarify how the GST mechanism will work for the exporters which are now enjoying various tax reimbursement such as duty drawback, advance authorization and advance licenses etc.
• The Custom duty on import of textiles machinery, accessories and fabrics should be abolished allowing free import at nil rate.
• Import duty on manmade fibres to be reduced to zero, so that the garment exporters can get cheaper man made fabrics available in the country for manufacture and export garments at more competitive prices.
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