FIEO welcomes hike in duty drawback rates

Chennai, July 13 (UNI) Federation of Indian Export Organisations (FIEO) today welcomed the Centre announcing a hike in duty drawback rates for most of the products.

In a statement here today, FIEO Vice-President and Southern Region Chairman A Sakthivel hailed Prime Minister Manmohan Singh and Union Finance Minister P Chidambaram for the move and felt for all pervasive growth of export sector, the recommendations of the Commerce Ministry need to be implemented.

He suggested scrapping Fringe Benefit Tax (FBT) and Service Tax in export sector as exports should always be tax neutral to enable India get the competitive edge to help it achieve 1.5 per cent share of the global market.

On reduction of interest rate not exceeding the benchmark prime lending rates minus 4.5 per cent on pre-shipment credit upto 180 days and post-shipment credit upto 90 per cent on outstanding amount till December, he said it was not adequate considering high transaction cost.

He suggested the interest rate be further reduced by two per cent and the facility extended beyond December 2007.

Mr Sakthivel felt the capital subsidy of ten per cent and five per cent interest subsidy were required to be extended under TUF scheme for garment and knitting sector to make exports more competitive and help the sector generate more employment.

UNI