FIEO President presents six point charters to Commerce Minister
The interactive session with Commerce & Industry Minister points for consideration by Mr. A. Sakthivel, President, FIEO. The points are given below:
1. Continuation of DEPB scheme for next five years:The fate of DEPB scheme is uncertain and there is need to provide stability to the scheme as for many products, drawback rates are not available. Exporters are doing their costing factoring the rebate available under DEPB scheme.The scheme may, therefore, be extended for next five years.
2. Enhancement of incentives under various promotional schemes given in Chapter 3 of the Policy: The Foreign Trade Policy provides incentives through FPS, FMS, Market Linked Product Scheme and VKGUY where benefit ranges between 1.25% to 5%.Due to very low benefit under few schemes, exporters are reluctant to avail it. The export benefit under all these schemes should be a minimum of 3.75%. Some of the benefits under these schemes are expiring on 30th September, 2009.Benefit under all such schemes may be extended till 31st March, 2012.
3. Benefits to Status Holders: The Exim Policy provided various fiscal benefits to Status Holders which, of late, have been withdrawn. The non-fiscal benefits available to the Status Holders are also now available to other exporters based on their track record. The Status Holders may, therefore, be granted duty free benefits @ 10% of their preceding years exports so as to aggressively market the products and diversify the exports base.
4. Scheme to rebate State taxes: GST is likely to be introduced as dual GST one for Central taxes and other for State taxes. The merging of two into a comprehensive national GST will take a long time. Exports are already burdened with the incidence of State and local levies which for certain products in certain States may be as high as5 -6% of the FOB value. Foreign Trade Policy should therefore, announce a new scheme to rebate State and local levies on an average basis.
5. Scheme to promote branded products: Indian exports suffer due to global slowdown as they are mostly in price sensitive segment. Very few exports are being done in the individual brand of the company. It is an established fact that branded products have suffered less in the contracting market as compared to generic products. Government should promote exports of finished goods, assemblies, sub-assemblies in individual brands. Such exporters may be given additional benefits of 2% under focus schemes, exemption from value cap under DEPB/drawback schemes and grant of double weightage for recognition as Status Holders.
6. Zero duty EPCG Scheme: Due to constant reduction in customs duty, very less benefit is now available under EPCG scheme (basic customs duty ranges between 5 – 7.5% where EPCG allows such imports at 3%). EPCG duty should allow import of capital goods at zero duty. The concern of domestic capital goods industry is met through availability of deemed export benefits so as to provide them a level playing field.