Fieo submits new Budget wish-list in face of rising exports

Worried that the Union government may unwind the stimulus measures granted to the export sector in the wake of rising foreign trade, the Federation of Indian Export Organisations (Fieo) Director-General, Mr Ajay Sahai, has submitted a fresh Budget wish-list for the Finance Ministry's consideration. Some of the major points are:

• A turnover tax on exports in place of income-tax. The turnover tax will simplify the tax procedure and reduce the administrative burden on exporters. This tax can be collected at 0.25 per cent on all remittances received from abroad, thus plugging any leakage and reducing the cost of collection.
• Investment-linked incentives for micro, small and medium enterprises (MSMEs) in the export sector. To increase investment in manufacturing, MSME export sectors be given tax concession on investment in capital and machinery.
• Extension of tax holiday by three years for export-oriented units and units in software technology parks.
• Exemption from service tax on all output services for exports.
• Service tax exemption to all export promotion councils.
• The rate of depreciation on old machinery should be increased from 15 per cent to 25 per cent to encourage purchase of new machinery.
• Credit for exporters at a flat rate of six per cent.
• Extension of interest subsidy scheme till March 31, 2013, in case providing export credit at 6 per cent is not feasible.
• Foreign currency credit at the earlier rate of LIBOR plus 100 basis points. (Following the financial crisis, this rate was increased to LIBOR plus 350 basis points).
• Rectification of inverted duties structure in silk and synthetic fibre.

Notification for cash rebate of accumulated Cenvat credit on account of reduction in excise duty.