Fw: PHOTOGRAPH OF MR.PRITAM GOEL IS ALSO ATTACHED

 

GARMENTS EXPORTERS ASSOCIATION

G-19-B, HEMKUNT CHAMBERS, 89, NEHRU PLACE, NEW DELHI – 110019

TEL.: 30882260 , 66096641, 64687275 Fax : 30882261 E.mail :gea_1974@airtelmail.in

 

JULY 10, 2009

 

FROM :   SURINDER ANAND

               GARMENTS EXPORTERS ASSOCIATION

                MOBILE : 9818478753

               E.MAIL : gea_1974@airtelmail.in

 

TO      :   THE HINDU BUSINESS LINE

                E.mail. : Budget2009Reactions@gmail.com

 

COMMENTS OF MR.PRITAM GOEL, MANAGING DIRECTOR,

 M/S LYRA INDUSTRIALS  AND HONY.GEN.SECRETARY,

GEA ON THE BUDGET PROPOSALS  2009-10

 

According to Mr.Pritam Goel,  the Budget has failed to provide any special provision for the garment sector of the textile industry. The Finance Minister has neither restored 100% exemption to export earnings under section 80 HHC of Income Tax Act nor exempted the export sector from payment of Service Tax on all export related services.  However, one positive aspect of the budget proposal is withdrawal of Fringe Benefit Tax, which is a step in the right direction, but the increase in excise duty on cotton and man-made fibre will increase the financial burden on the garment exporters.

 

As the global melt down has increased the international competition and reduced the demand of garments due to slow down in the world economy,  Mr.Goel has again appealed to the Finance Minister to reconsider the matter and provide adequate fiscal relief to the garment sector of the textile industry by recommending at least 5% increase in duty drawback;  restoration of 4% interest rate subvention on export credit and  income tax exemption under section  80 HHC of the Income Tax Act for five years;  withdrawal of Service Tax on all export related services.

 

Mr.Goel further pointed out that the economic survey had laid emphasis on revival of the economy by providing fiscal incentives to labour intensive industries like textiles.   However, the Budget proposals have not considered the opinion expressed by economic survey, in connection with labour intensive industry.  The Budget proposals are also silent regarding suggestions of the Economic Survey to reforms labour laws for the labour intensive industries. 

 

Mr.Goel felt that the Budget has also not addressed the issues of competitiveness and specific concerns relating to high transaction cost, poor infrastructure, realistic duty drawback rates to reverse the recent downturn in garment exports.   The Budget proposals have thus disappointed the garment exporters.

 

However, the welcome feature of the Budget proposals are  withdrawal of Fringe Benefit Tax,  exemption of Service Tax on transport of goods by road and commission paid to Foreign Agents, increased provision of Market Development Assistance (MDA) from Rs.50 crore to Rs.124 and continuation of ECGC coverage upto 95 per cent to labour intensive sectors and simplification of procedures for refund of service tax based on self-certification of the documents where such refund is below 0.25 per cent of FOB value and certification of documents by a Chartered Accountant for value of refund exceeding the above limit.

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