Exporters seek sops

NEW DELHI: Reeling under the impact of shrinking demand from key western markets, Indian exporters have demanded a slew of sops, including exemption from payment of fringe benefit tax, increase in the reimbursement rates for various input duty refund schemes and an exemption on payment of service tax on all services used.

Representatives from eight export promotion councils and the Federation of Indian Export Organisations (Fieo) met finance minister Pranab Mukherjee on Tuesday, requesting him to include these measures in his Union Budget slated for next month. With exports falling by 33% in April, giving policy support to the segment has become one of the priorities of the new
UPA government.

"The FM was quite sympathetic towards us. While he did not give an immediate response to our demands, he acknowledged that export was one of the worst hit sectors of the economy. He promised us that the government would do whatever it could to support us," Fieo director general Ajay Sahai told ET.

The list of suggestions forwarded by Fieo chief A Sakthivel include an exemption from payment of FBT by exporters���a demand long pending with the government ��� and an income tax exemption for five years for exporters. It also asked for an increase in the input duty reimbursement rates under various schemes such as DEPB and drawback to help "neutralise" the fiscal stimulus packages being given by other countries including China, Vietnam and Bangladesh.

Apparel Export Promotion Council (AEPC) chairman Rakesh Vaid pointed out to the FM that there was a continuous decline of exports since September 2008.

In the month of April 2009, the decline was around 8%. The demands made by AEPC for the textiles sector include an enhancement of the technology upgradation fund for the sector, an increase in the discount on interest rates being given to textiles and exemption of customs duties on import of machinery.

Secretaries in the commerce, revenue, expenditure and finance departments also attended the meeting.