Interim Budget 2009-10
Members of the Council
February 16, 2009
Sub : Interim Budget 2009-10
We wish to inform you that the Council had submitted memorandum to the Government of India, seeking the following relief measures for the leather sector in view of the adverse impact of the current global financial crisis.
- Enhancement of Duty Drawback rates for leather and leather products to the pre revised level of 2008-09 as most of the exporters are operating under duty drawback scheme.
- Provide Working Capital Term Loan to offset Currency Fluctuation Losses.
- Increase the weightage for leather sector under the Focus Product Scheme from 1.25% to 2.5% of FOB value of exports.
- Extensions of Focus Market Scheme to USA and Europe, as these are major markets for the leather sector, accounting for a share of above 75% and currently under financial crisis.
- Increase the duty free entitlement under the Duty Free Import Scheme (DFIS) from 3% to 5%.
- Provide the reduced interest rates of BPLR minus 6.5% for at least a two year period till March 31, 2011.
- Permit Service Tax Exemption for the 19 notified Services to be claimed from Oct’ 6, 2007 and Permit Service Tax on Foreign Agent’s Commission to be claimed on actual commission paid, without limiting it to a certain percent of the FOB Export Value.
- Implement a mechanism to ensure speedy refund of VAT as it blocked huge working capital
You are aware that the Hon’ble Union Minister for Finance Shri Pranab Mukherjee presented the Interim Budget today. As far as the leather sector is concerned, there has been no major announcement in the interim budget other than extension of the 2% interest subvention on pre-shipment and post-shipment rupee export credit from March 31, 2009 to September 30,2009. The budget highlights downloaded from the website of Union Finance Ministry are enclosed herewith for your reference. The announcement on extension of interest subvention is mentioned under the heading BUDGET ESTIMATES in the budget highlights.
As the intervention measures sought by the Council are necessary to reduce the adverse impact on the leather sector, the Council will continue to represent for a speedy implementation of the above measures for the benefit of the leather sector. This is for your kind information.
Ali Ahmed Khan
Council for Leather Exports