Budget 2018: Reeling under dwindling exports, AEPC seeks several relief

Budget 2018

Reeling from a continued fall in export growth and marginal refunds on the goods and services tax (GST), the Apparel Export Promotion Council (AEPC) has written to the government, seeking 12-15 types of relief. They want the duty drawback and the refund of state levies (ROSL) to be restored to pre-GST levels, and also exemptions from the new indirect tax for exporters.

Growth of apparel exports has clocked a negative 39 per cent, 11 per cent and 8 per cent, respectively, in October, November and December last year, according to H K L Magu, chairman, AEPC.

Now, in the run-up to the Union Budget, the export body has sought incentives from the government, to boost exports. It wants the duty drawback on cotton apparels to be restored to pre-GST rates of 7.5 per cent and the ROSL of 3.5 per cent. They also want to be exempted from 18 per cent GST for air freight.

After the GST roll-out last year, the duty drawback fell to 2 per cent; ROSL to 1.5 per cent on cotton apparels, and 2.5 per cent and 1.5 per cent, respectively, on different man-made apparels.

Till September, when the previous rates were applicable, apparel exports grew in double-digits. However, October onwards, exports began taking a hit.

"We have been asking the government to support apparel exporters to survive. There have been blockages of funds between July and December; hardly anybody got GST refunds. Dollar weakened to be valued at Rs 63. We have become uncompetitive; Bangladesh has begun cashing in on this," said Magu.

He added, "The government did take notice of the impact. Hence, in the mid-term review, the merchandise export incentive scheme was increased from 2 per cent to 4 per cent. However, more steps are needed to revive the industry.

One area where Finance Minister Arun Jaitley will be under no pressure when he presents his Budget is defence spending. Under no pressure because there is a remarkable consensus among our political parties that we continue our wild and wholly disproportionate splurge on a bloated army.

Let’s have a look at the numbers. Last year, Mr Jaitley allocated Rs 3.59 trillion to the Ministry of Defence, 57 per cent of which went to the army, 22 per cent to the air force, 14 per cent to the navy and much of the remaining 7 per cent went to the Defence Research and Development...

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