New Delhi: Removal of fringe benefit tax on export-related activities and extending duty refunds up to March 2010 may form part of the five-year foreign trade policy -- a key area for action for the new commerce minister.
“The immediate priority is to come out with a new foreign trade policy ... we will push for the extension of Duty Entitlement PassBook (DEPB) scheme up to March 2010 and removal on the Fringe Benefits Tax (FBT),” a senior Commerce Ministry official said.
Facing a crisis like situation because of global slowdown, exporters have been demanding increase in the duty refunds and extension of drawback and DEPB schemes, removal of FBT and moratorium on repayment of the bank term loans.
They have also been seeking exemption on export profits, settlement of losses in derivatives and expeditious release of duty refund claims.
FBT adds to about 7% of the cost of export marketing, according to the Federation of Indian Export Organisations (FIEO).
It said that removal of FBT would bring down marketing costs.
“Exporters have to travel abroad frequently and FBT reduces the competitiveness of the Indian products,” FIEO President A Sakthivel said.