Budget 2022: Exporters demand fiscal incentives and support measures
- Exporters demanded enhanced allocations for the RoDTEP scheme
- They also suggested financial incentives to address logistics challenges
- Exporters suggested reduction of income tax on partnerships and LLPs
In the forthcoming Budget, exporters have sought support from the government to promote the growth of the country’s outbound shipments. Exporters demanded enhanced allocations for the RoDTEP scheme, high import duty on plastic finished goods, setting up of an Indian shipping line, and reinstating exemption for duty-free import of critical inputs for leather products.
They have also suggested financial incentives to address logistics challenges, and reduction of income tax on partnerships and LLPs to support MSME players.
According to the Federation of Indian Export Organisations (FIEO), there is a need to encourage large Indian entities to build an Indian shipping line of global repute as it would help reduce dependence on foreign shipping lines.
Due to its dependence on global shipping companies and rising freight cost, the export sector is facing major issues.
FIEO Director-General Ajay Sahai said, "Overseas marketing is a big challenge for exporters, more so for MSMEs, as it entails a high cost. We need to bring the Double Tax Deduction Scheme for Internationalizations to allow exporters to deduct against their taxable income… A ceiling of USD 5 lakh may be put under the scheme so that the investment and tax deduction are limited".
Mumbai-based exporter and Chairman of Technocraft Industries Sharda Kumar Saraf said that the finance minister should provide a suitable budget for Reimbursement of Duties & Taxes on Export production (RoDTEP).
He said that RoDTEP is one of the most important tools to support export marketing, but its present budget of about Rs 40,000 crore is not sufficient.
Plastics Export Promotion Council of India (Plexconcil) Chairman Arvind Goenka suggested that the import duty on plastic finished goods should be at least 5% higher than polymer raw materials.
"For instance, import duty on PVC resin is 10% and that on value-added PVC goods is also 10%, thereby there is no incentive to boost domestic production," Goenka said.
Council for Leather Exports (CLE) Chairman Sanjay Leekha suggested reinstatement of the exemption for duty-free import of critical inputs for leather garments and footwear. He also recommended the extension of the basic customs duty exemption for the import of lining and interlining materials.
According to Leekha, apart from boosting exports these measures will promote value addition within the country and make domestic products competitive in the global markets.
He has also suggested reinstatement of basic customs duty on import of wet blue, crust, and finished leather as the exemption was removed last year.
Chairman of Farida Group Rafeeq Ahmed said that steps for the labour-intensive sector in the budget will help in creating more jobs and increasing exports.