SME Times News Bureau | 22 Jan, 2020
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
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.
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.
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.
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.