Ahead of the upcoming Union Budget to be presented on February 1 exporters’ bodies have made a presentation to Finance Minister Nirmala Sitharaman and are waiting eagerly for a favourable Budget.
They had made a presentation to the Finance Minister for tax deductions on product development and Research and Development, Income Tax rate reduction for non-corporates, double tax deduction scheme for internationalisations and deemed export status to Indian industry under the global bidding of procurement.
The Federation of Indian Export Organisations (FIEO) and Apparel Export Promotion Council (AEPC) in their presentation to the government have suggested to bring a Double Tax Deduction Scheme for Internationalizations to allow exporters to deduct against their taxable income, twice the qualifying expenses incurred for approved overseas activities including market preparation, market exploration, market promotion, and market presence.
Talking to ANI, Ajai Shai, Director General and CEO, FIEO said, “We want the budget to draw a road map for export. Recently, only exports were in positive territory. The basic focus for the export sector should be Research and Development. Research and Development is extremely important for countries’ export. We had requested that tax deduction on Research and Development expenditure, which has come down from 200 percent to 100 percent now may be restored to its original position as Research and Development investment in India is extremely low.”
“We also want that Centre can provide duty-free import of Research and Development equipment and consumers to large companies who are in the field of exports. We are also focusing on the marketing expenses for small and medium-sized enterprises (SMEs). If we can create an export development fund this will help the SMEs,” he added.
He further suggested that the central government may consider introducing a scheme in line with Sabka Vishwas (Legacy Dispute Resolution) Scheme, 2019 to resolve all disputes relating to Customs and Directorate General of Foreign Trade (DGFT).
Dr. A Sakthivel, Chairman, AEPC said for bolstering the textile and apparel sector, the government should provide higher budgetary allocation, mitigate the high cost of working capital, strengthen the brand value of Indian textile and apparels, ease access to funds for technological upgradation, remove the cap on benefit under the Technology Upgradation Fund (TUF) scheme, increase research and development into new products to suit emerging global demand, increase international technical collaborations, raise Foreign Direct Investment (FDI) limit in multi-brand retail and draw an aggressive export policy.