| Date: |
01-04-2015 |
| Subject: |
Foreign Trade Policy: CII demands interest sop, abolition of MAT in SEZ units |
NEW DELHI: The Foreign Trade Policy, scheduled to be unveiled tomorrow, should safeguard special economic zones, re-introduce interest subvention, promote value-added products and expand the scope of coverage of the present schemes, CII said today.
Sharing its wish-list for the much-awaited policy, the industry body said the focus must be on promoting value-added products and strengthening India's foothold in bigger economies like US and EU where India has relatively low share in total trade in comparison to China and other smaller emerging economies.
"Interest rates in India are among the highest in comparison to major economies, which acts as a big roadblock for Indian exporters. The government should reintroduce interest subvention scheme of at least 3 per cent which lapsed last April," CII said.
Pitching for broadening the coverage of schemes, CII said infrastructural bottlenecks are making exports to prominent trade markets uncompetitive and it is advisable to extend FMS benefits to prominent trading partners like the US.
"Special Economic Zones, where over Rs 2 lakh crore have been invested, contribute around 30 per cent of the country's total exports and provide sizeable employment, need attention on immediate basis. It is ironical that instead of Industry going to SEZ, they are looking at getting denotified and moving out from SEZs," the industry body said.
Contending that imposition of Minimum Alternate Tax (MAT) on book profits of units operating in SEZs has made the units unviable and unattractive, CII suggested that MAT should be abolished on such units.
Moreover, it said, duty drawback on exports to SEZ should be credited to exporter's bank account similarly as exports through ICES (Indian Custom EDI System) without the need to submit physical documents.
CII further said that most of the duty drawback rates are currently low and do not adequately support and compensate exporters for taxes and duties paid by them, therefore, the Government should announce one time increase of 1 per cent on the new drawback rates.
Moreover, it said the Government should extend Focus Product Scheme (FPS) to cover engineering products which are primarily labour intensive.
The new Foreign Trade Policy, scheduled to be unveiled tomorrow, will focus on promoting service exports and giving fillip to the manufacturing sector as part of the government's 'Make in India' campaign.
The FTP, which is being announced at a time when India's exports are declining, may extend interest subsidy scheme and other incentives for labour intensive sectors such as leather and handicrafts.
Besides services sector, it would focus on standards and branding of products and also take care of World Trade Organisations's rule and free trade agreements of India.
Source : economictimes.indiatimes.com
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