Home / Knowledge / News / Textiles / Excise duty cut on cotton yarn allures President, FIEO, to appraise Budget
Excise duty cut on cotton yarn allures President, FIEO, to appraise Budget
Jul '09
Hailing the Union Budget 2009-2010, Mr A. Sakthivel, President, Federation of Indian Export Organisations (FIEO) said that abolition of Fringe Benefit Tax, extension of tax holiday for one more year for EOUs, STP, EHTP units, extension of interest subvention scheme till March 2010 are welcome move by the government to enhance competitiveness of export sector.

President, FIEO also thanked the government for providing exemption to the exporters in respect of goods transport services and commission to foreign agents as well as for simplification of procedures for refund of service tax. Shri Sakthivel, however, was optimistic that the exemption from service tax in respect of these two services will pave the way for complete exemption on output services for the export sector in months to come.

The increase in Market Development Assistance funds from Rs.50 crore to Rs.124 crore is a welcome step said, FIEO Chief. However it fell short of our expectations as we were anticipating a quantum jump in the marketing support in view of dire necessity, for diversifying the market base.The continuation of ECGC coverage up to 95% to badly hit export sector will provide necessary relief to labour intensive sectors.

FIEO Chief also appreciated the government move to bring more items in the list of duty free import of trimmings and embellishment for readymade garments, leather and textiles sector.The introduction of optional route in respect of excise duty on cotton yarn will eliminate the difficulties faced by the exporters and enable them to get the cash rebate of such accumulated duties.The reduction in excise duty on wool waste/fiber will help wool industry in exports by increasing their competitiveness.

Mr Sakthivel also thanked the Finance Minister and Commerce and Industry Minister for providing exemption to FIEO and other export related organizations from the service tax which will help these organizations to focus on providing necessary support to small and medium entrepreneurs.

President, FIEO however, requested the government to consider income tax exemption for the exporting units and look at the option to offset the derivative losses to SMEs exporters with a view to provide them some relief.

Federation of Indian Export Organisations (FIEO)

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