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New Delhi: In a pre-budget consultation, the Federation of Indian Export Organization (FIEO) on Saturday, in a view to boost the Indian export industry, suggested a slew of measures to the Nirmala Sitharaman led Finance Ministry which included bringing double tax deduction scheme and setting up of an export development fund.
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FIEO President Sharad Kumar Saraf, on the pre-budget consultation meeting with FM, suggested introducing a “Double Tax Deduction Scheme” which can allow exporters to deduct against their taxable income.
What is the Double Tax Deduction Scheme?
According to Saraf, in the “Double Tax Deduction” scheme, the exporters can get tax deductions over their taxable income which will in turn help in the growth of the export industry, and a ceiling of $5,00,000 may be put under the scheme so that the investment and tax deduction are limited.
In order to help the Micro Small and Medium Enterprises (MSME), the exporter’s body president also stressed to create an Exporter Development Fund, with a corpus of 0.5 per cent of the total exports from the country.
Deemed Status to Indian Export Houses
Saraf in his slew of measures asserted the government to grant deemed status to Indian export houses after they win global tenders. As the local export houses will substitute direct import which would have taken place if the contract had been won by a foreign supplier.
“Deemed export status would enhance the competitiveness of Indian industry vis-? -vis foreign suppliers as the former would enjoy certain tax-related benefits,” Saraf said.
Interest Waiver Scheme on the lines of Sabka Vikas Scheme 2019
A large number of cases are pending with the customs department and Directorate General of Foreign Trade, the export body recommended to launch a scheme on the lines of Sabka Vikas Scheme 2019 (Legacy Dispute Resolution), to resolve all disputes relating to customs and DGFT.
As per the scheme, a waiver of interest and penalty will be given on the duty liability, which will financially help the industries hit by the drastic decrease in demand in the domestic and the global market.
Other Measures
Apart from tax deductions and setting up of Export development fund, the body also recommended Export Credit Guarantee Corporation of India (ECGC) coverage to the Banks for export finance, and higher budget allocation to the Department of Commerce.
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