TEA urges for exemption of FBT

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Tirupur, Feb 18 (UNI)Tirupur Exporters Association (TEA)today urged the Parliamentary Standing Committee on Commerce to recommend to the Union Government for exemption of Fringe Benefit tax(FBT) on export expenses to save the textiles exporters, as they were severely affected due to appreciation of rupees against US Dollar.

In a memorandum to the Committee here, TEA President A Sakthivel said the imposition of FBT on sales promotion expenses, including publicity, tours and travels, boarding and lodging and free samples had seriously affected the Indian Exports.

He said during 2006-07, knitwear exports from Tirupur recorded Rs. 11,000 crore and had set an export target of Rs 25,000 crore by the end of 11th Five-year Plan. However, due to appreciation of rupee by 14 per cent against dollar, the exports from Tirupur, was facing downward trend with a negative growth of ten per cent against the past two-year growth rate of 15 per cent.

Mr Sakthivel said though the Textile Industry has potential for growth and employment provider, compared to other industries, our global market share in textile is less than 3.5 per cent and for reaching the target of seven per cent in global market, the government should assist the sector.

Requesting the exemption of service tax for rented building, the President urged the Government to increase the duty drawback rate by three per cent. The Duty Drawback rate currently given to knitwear garment exporters was eleven per cent and it is insufficient to off-set the 15 per cent appreciation of rupee against dollar.

He said the exporters were incurring loss in hedging and this will be an extra burden to them and they should be compensated.

The dual exchange rate can be introduced and Rs 42 per dollar can be fixed for exporters for one year, he added.

He urged the committee to recommend to the government for labour law reforms, introduction of contract labour system, increase of working hours and implementation of marine discharge project.

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