In its pre-budget memorandum, the Tirupur Exporters’ Association (TEA) among many demands has asked for extension of rupee export credit at 3 per cent interest rate subvention, import of specialty fabric using export performance certificate and increase TUFS subsidy for garmenting machinery.
Among other demands, the apex knitwear exporters trade body has asked the finance minister to consider providing investment allowance, withdrawal of alternate minimum tax (AMT), refixing of TDS and enhanced wealth tax limit.
“In order to enhance knitwear exports and stay competitive in the global market where exporters are facing stiff competition from countries such as China, Bangladesh, Vietnam, Cambodia and Indonesia, the finance ministry should consider these proposals,” TEA said.
“Apparel manufacturers, especially hosiery producers comprise mostly of units under the SME non-corporate sector. So, in order to increase exports, deduction should be extended to the non-corporate sector also and the minimum ceiling of investment may be scaled down to Rs one crore,” TEA president, A Sakthivel said.
He added, “The levy of AMT virtually reduced the total exemption provided under the Finance Act 2011 to only 35 per cent because of the levy of tax at the rate of 18.5 per cent on the income before deduction and which is allowed to be carried forward for a period of 10 years.”
“This levy of AMT causes acute crunch in the liquidity of the units as they have to service their debts also during the period. This provision may be withdrawn so as to enable the units to avail full exemptions in the hour of need,” he explained.
According to the president, the present provisions of Sec 32Ac envisages a deduction of 15 per cent of the value of new machinery acquired and installed in the year, which is available only to corporate assesses and there is a ceiling of the minimum investment at Rs 25 crore in purchase and installation of new machinery.
“The threshold limits fixed for deduction of tax at source (TDS) are outdated and substantially low when compared to the inflationary trend and have to be suitable refixed and also increase threshold limits under other provisions like basic limit and turnover limit of audit u/s 44 AB,” he requested the finance minster.
“Finally, as the duty-free import percentage has been increased to 5 per cent, the non-utilisation value could be still on higher side and so, to utilise the given facility out of 5 per cent, a maximum of 3 per cent of the licence be allowed for import of fabrics without keeping restriction of 1,000 metre,” TEA said. (AR)
