Policy

Exporters’ body seeks double tax deduction for overseas marketing activities

Our Bureau | | Updated on: Dec 17, 2021

FIEO proposes fiscal benefits for container manufacturing

In order to support overseas marketing efforts, exporters have asked the Finance Ministry to introduce a double tax deduction scheme that will allow them to deduct twice the expenses incurred for approved overseas market activities against their taxable income.

Exporters body FIEO, in its pre-Budget consultation meeting with Finance Minister Nirmala Sitharaman on Friday, also sought fiscal benefits for container manufacturing in the country to overcome the acute shortage of containers in the country. The Union Budget for 2022-23 is likely to be announced on February 1, 2022.

The overseas marketing activities for which the double tax deduction may be provided could include market preparation, market exploration, market promotion and market presence.

“A ceiling of $500,000 may be put under the scheme so that the investment and tax deduction are limited,” the exporters’ body said.

The suggested scheme is line with a similar facility provided by Singapore to its SME units.

Container shortage

FIEO stressed on the problems faced by exporters due to the shortage of containers owing to high dependence on imported containers. “Container manufacturing requires a special kind of steel which provides a competitive edge to China which manufactures over 80 per cent of global containers. We need to encourage domestic manufacturing of the containers by providing fiscal benefits to container manufacturing in the country which is required all the more as we are looking at $1 trillion exports in the next five years,” FIEO stated.

The exporters’ body also pointed out the need to encourage large Indian entities to build an Indian shipping line of global repute. Indian businesses remitted around $65 billion as transport services in 2020 and in 2021; the figure is likely to cross $100 billion, FIEO said.

Published on December 17, 2021
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