Budget disappointing, say exportersFebruary 29th, 2008 - 8:35 pm ICT by admin
(Lead, Changing dateline)
New Delhi/Kolkata, Feb 29 (IANS) The union budget for 2008-09 did not address the problems faced by the Indian exporters, who have been affected due to the rising rupee against the dollar, exporters said Friday. “The budget has not addressed the problems faced by the exporters in view of appreciating rupee and stagnating traditional markets,” said Ganesh Kumar Gupta, president, Federation of Indian Export Organisation (FIEO).
“The proposal to provide zero rating of exports through refund of states and local levies, exemption from FBT (fringe benefit tax) on genuine business expenses, exemption from all service taxes on services used during the course of exports to provide a level playing field to Indian exporters have not been considered.”
He was also upset that schemes such as the Electronic Hardware Technology Park Scheme, export-oriented units (EOUs) and the Software Technology Park of India scheme, which offered a slew of benefits and tax sops, have not been extended. These schemes expire March 31, 2009.
While presenting the budget, Finance Minister P. Chidambaram said: “Merchandise exports have come under some pressure due to the appreciation of the rupee and may fall just short of the target of $160 billion, although the growth rate was strong at 21.8 percent during April-Dec 2007-08.”
“The government is sensitive to the needs of the export sector and will continue to respond sympathetically as the situation demands,” he added.
Kolkata-based Engineering Export Promotion Council (EEPC) said the budget completely bypassed the pressing requirements of the engineering exporters.
EEPC chairman Rakesh Shah said: “The budget proposals carry no major policy initiative to address the sharp slowing down of exports from 25.3 percent in 2006-07 to 7.7 percent in rupee terms in the first nine months of the current fiscal.”
He said the exporters had hoped that the budget would take fundamental policy initiatives to correct the imbalances in the economy that had affected the exporting community.
Shah welcomed the abolition of import duty on steel melting scrap and aluminium scarp as well as the lowering of CenVAT to 14 percent.
“The exporting community was expecting that the Service Tax Refund benefits for 13 services would be converted into an Exemption Scheme as promised by the government, but there has been no such move in the budget,” he said.
He said the council also hoped that the service tax on foreign commission agents would also be included in the refund/exemption mechanism.
“Sadly, this too has not been accepted by the finance minister,” he said.
Shah said no policy pronouncement was made to bring in competitive conditions, such as the need for imposition of an export duty on steel to stabilise the domestic prices.
Tags: budget proposals, dollar exporters, eepc, export organisation, export promotion council, first nine months, fringe benefit tax, fundamental policy, genuine business, indian export, oriented units, p chidambaram, policy initiative, policy initiatives, rakesh shah, rupee terms, software technology park, target, tax sops, union budget