Garment exporters want fringe benefit tax exemptionJanuary 20th, 2009 - 7:00 pm ICT by IANS
Gurgaon, Jan 20 (IANS) India’s garment exporters, grappling with falling demand and increasing competition from countries such as Bangladesh who offer cheaper alternatives, Tuesday said the government should exempt it from the purview of fringe benefit tax. “We are expecting a stimulus package from the government, and we hope that the garment export sector will be exempted from the fringe benefit bracket as is applicable to IT sector,” Rakesh Vaid, chairman of the Apparel Export Promotion Council (AEPC), told IANS.
“Due to the meltdown in western economies there has been less buying this year, the full impact of the downturn will be witnessed after March for which we need support from the government,” he said.
AEPC, which inaugurated the 42nd India International Garment Fair here Tuesday, will meet the Planning Commission in this regard in the first week of February, Vaid added.
The agency also presented its demand to Planning Commission Deputy Chairman Montek Singh Ahluwalia, who was present at the inaugural session of the four-day fair.
AEPC, which represents the $6.5-billion garment export industry, also wants the duty drawback rate to be increased to 14.1 percent from the current 8.8 percent and re-introduction of income-tax benefits under section 80HHC. (Under this section, exporters can claim tax deduction if foreign exchange is brought into the country within a prescribed time frame).
“The global scenario is such that we cannot think of growth, the question is of survival now and we are just waiting for 2009 to pass so that the situation can stabilise,” AEPC deputy secretary general Vijay Mathur said.
According to an AEPC report, exports declined 11.29 percent last November while the outlook for 2008-09 is expected to show a negative 9.4 percent growth.
The US and Europe account for more than 80 percent of the India’s garment export.
Vaid said that exports to the US in the first 10 months of 2008 were down 3.71 percent while Vietnam and Bangladesh posted 22.51 and 10.15 percent growth in the American market during the same period.
India’s share in the $360-billion global garment export market stands at 2.8 percent.