In its Budget wishlist, exporters’ body FIEO has demanded introduction of “Double Tax Deduction Scheme for Internationalization of MSMEs” to allow MSMEs to deduct against their taxable income, twice the qualifying expenses incurred for approved overseas activities including market preparation, market exploration, market promotion and market presence.
FIEO said that overseas marketing is a big challenge for MSME exporters as it entails a very high cost. It added that a ceiling of USD 2,00,000 may be put under the Scheme so that the investment and tax deduction are limited.
FIEO also said that the marketing support under Market Access Initiative of the Ministry of Commerce is very small. A scheme of Rs 300 Cr is insufficient to support exports of over US$ 535 bn recorded last year.
The current scheme can at best cover 5000 MSMEs (assuming MAI support of Rs 2,00,000 for 3 exhibitions in a year ) out of over 1.2 lakh active MSMEs in exports. We should create an Export Development Fund with a corpus of 0.5% of country’s exports for helping the MSME Exporters.
It added that health sector is one of the fastest growing services exports but still huge mismatch exists between the demand and supply. We require close to 3 million beds to reach the target of 3 beds per 1000 people by 2025.
We require about 1.5 million doctors and 2.5 million nurses to meet the growing demand of the sector. The required capacity building is the need of the hour and so is augmenting investment into the sector. Foreign patients from Africa and Middle-East are making beeline at Indian hospitals which can be multiplied with good hospitals in the country, it said.
FIEO added that India’s outward remittance on account of transport services is increasing year after year. We remitted USD 48 billion, 57 billion and 67 billion in 2016, 2017 and 2018 respectively.
When we are looking at increasing our international trade to USD 2 trillion in an economy of USD 5 trillion, the outgo on transport services will increase to USD 150-200 billion. While we need to strengthen Shipping Corporation of India, new large shipping companies may also be set up in India to exploit the ready market available to them, FIEO said.
Refund of GST at the airport, as envisaged under IGST Act, has not yet been operationalised. Such an initiative will not only give fillip to tourism but will also help in exports of handicrafts, non-precious jewellery, carpets, Ayush and herbal products, beauty products etc, FIEO said.
Published On : 22-01-2020
Source : SME Times
