Exporters say suspension of SVAT disincentive to exports


The EASL, whilst understanding the current state of the economy, find this budget is more of a corrective nature. It does not address the need to progress the export industry.

Aspect such as improving standards of education, encouraging the growth of competitiveness of SMEs, aiming to attract FDIs and setting up a system under PPP to monitor the implementation of the budget, as also the proposal to establish KPIs for ministries are positives that need to be acknowledged

However the fact that taxes for Exporters has been increased from 12% to 14%, the withdrawal of SVAT which hugely minimized the transaction costs, will in our view, be a disincentive to increasing Export values. Furthermore the imposition of the Trade in Services tax of 14%, which has negated the zero tax on Entrepot Trade could have a negative impact on this activity.

CESS on rubber increased from Rs.4/= to 15/= is a non- competitive measure and we would appeal that an even playing field between manufacturers and producers of rubber sheets etc. be considered.

The introduction of RAMIS is welcome but we would urge the Hon. Minister to withhold the suspension of SVAT until such time as RAMIS is fully operational.

ESC will have an impact on high value – small margin exporters, and relief should be given to ease the burden of cash flows.

The rationale for extending incentives for branding which has selectively been extended to only Tea, should be extended for other agricultural exports viz a viz spices, fruits and vegetable sector, floriculture etc.

The 75% rebate on tax for exporters who achieve a 15% increase in foreign exchange between 2015/2016 and 2016/17 is welcome but slightly unrealistic, but encouraging. However, to create an impetus for growth, it needs to be effective for a longer period of perhaps 5 years.

We trust the Hon Finance Minister will take on board our concerns.


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