New Delhi, Feb 21 (UNI) Reeling under the impact of a global slow down and the secular appreciation of the rupee, the garment exporting community today sought sops in budget 2008-09, including a hike in Duty Draw Back rates by five per cent and reduction in transaction costs.
The garment exporting community felt that the earlier two packages announced by Finance Minister P Chidambaram to provide succour to them was not sufficient to compensate them for loss in value of their exports and the hardening of the interest rates all round.
They wanted the government to bring down the interest rates to seven per cent--akin to the rate available in agriculture--as well as providing adequate need based funds to exporters.
''The interest on pre post shipment credit should be decreased further by two per cent and there was need to ensure proper implementation of the credit relief. The period of pre and post shipment credit may be extended to 360 days,'' Garment Exporters Association (GEA) Secretary General Surinder Anand said.
The GEA, regarded as the voice of the garments exporters, expressed gratitude to Commerce and Industry Minister Kamal Nath for fervently espousing the cause of the exporting community in various fora, including garment exporters.
It said, Mr Nath had been taking up their cause on various platforms, and were hopeful that his efforts will yield results.
They also lauded Mr Chidambaram for two generous packages for textile exporters earlier.
The GEA, however, regretted that the Reserve Bank of India (RBI) in its recent review of the credit policy had not provided any relief in interest rates.
To butteress it's case, the GEA quoted Chairman of the Prime Minister's Economic Advisory Council C Rangarajan as having said that the appreciation of the rupee is the major area of concern with the industry apprehending a decline in India's share in export markets and in many cases there was a decline both in levels and unit value.
The Council had also stated as the pressure of the rupee was likely to continue in the immediate future, clear signals need to be given to the Indian industry to make adjustments through productivity increases and to tap the booming domestic market.
The GEA said the government should restore 100 per cent exemption under Section 80 HHC of the Income Tax Act.
Apart from taxation relief, the garment exporters asked the government to reduce transaction costs by simplifying administrative procedures. These include reducing delays at custom clearance of goods, improving loading and unloading of cargo and ungrading infrastrucuture to avoid congestion at various ports.
Regarding the acute power shortage, the exporters asked Mr Chidambaram to exempt from excise duty and local levies generators and boilers run on diesel.
The exporters sought exemption from service tax on all export related services, saying that the procedure for refunds was time-consuming and resulted in unnecessary delays and harassment.
The other wish list of the garment exporting community included--exemption from Fringe Benefit Tax; arranging refunds of State levies on exports amounting to six per cent of FoB value; and abolition of custom duty on import of textile machinery, accessories and fabrics.
Mr Anand said exporters who sell their entire products overseas should be treated at par with 100 per cent EoUs irrespective of their location.
UNI MP GS DS1257