Financial Daily from THE HINDU group of publications
Tuesday, Mar 29, 2005
Financial Daily from THE HINDU group of publications Tuesday, Mar 29, 2005 |
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Industry & Economy
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Exports & Imports FIEO calls for zero duty EPCG scheme Our Bureau
New Delhi , March 28 IN order to make exports competitive, the Federation of Indian Export Organisations (FIEO) has called for introduction of zero duty EPCG (Export Promotion Capital Goods) scheme. "It is suggested that import of capital goods under EPCG scheme may be allowed at zero duty and exemption from 4 per cent additional duty of customs may be given to all ITA-1 (Information Technology Agreement-1) items when imported under EPCG scheme," stated the FIEO President, Mr O.P. Garg, in a release. The EPCG scheme allows import of capital goods at 5 per cent duty. This window was introduced when the basic Customs duty on capital goods was 35 per cent. However, in the Union Budget 2005-06, the peak basic Customs duty has been reduced to 15 per cent. For sectors such as textiles and leather, many types of machinery are available at 5-10 per cent duty. For all ITA-1 items, that include hardware and telecom equipment, the capital goods have been allowed at zero duty with 4 per cent additional customs. He also suggested that exporters be allowed the option to claim benefit on Net Foreign Exchange Free On Board basis, which if done, would encourage exporters to use indigenous materials. The benefit obtained under the Target Plus Scheme should be transferable so that number of exporters, particularly the merchant exporters, who are not be able to fully utilise the credit, could be compensated. This scheme provides additional facility to exporters who achieve minimum prescribed growth rate in their exports. Besides, the FIEO chief also suggested introduction of transferable advance licence, grant of drawback and export benefits for input obtained under Target Plus and Duty Free Credit Entitlement Scheme.
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