A core group comprising senior Customs and tax officials would be set up in the finance ministry to sort out all micro-level exports issues that fall within the ministry’s purview, finance minister Yashwant Sinha said to a Federation of Indian Export Organisations (FIEO) delegation.

The core group, to be chaired by the joint secretary (foreign trade), department of economic affairs, would include representatives from the Central Board of Excise and Customs (CBEC) and the Central Board of Direct Taxes (CBDT).

Sinha said it was part of the effort to build an institutional relationship between exporters and the ministry.

He agreed to hold a structured meeting with exporters once every quarter to discuss export-related issues at the macro-level, said a federation statement.

The federation members sought restoration of full exemption under Section 80 HHC for at least two to five years to help exports to recover.

The government should consider reverting to the pre-1989 position of having Section 35-b under which weightage of 1.33 times was given to compensate for export-related expenses including transaction costs.

The delegation emphasised that duty drawback, which is a reimbursement of duties paid by exporters, should be treated as an integral part of export profits.

Referring to export credit, the delegation said since prime lending rate (PLR) of banks vary, a uniformity should be brought in the interest rates charged by banks by denoting the lowest prime lending rate as the base.

It also sought lowering of the interest rates for exports which were far above those charged in the neighbouring countries.

The exchange earners's foreign currency account should be made fully convertible and exporters should be allowed to deposit loans from that account. This would be in line with the S S Tarapore Committee recommendations on full convertibility, it said.

The decision to include special additional duty on imports under the duty entitlement passbook scheme would have an adverse impact on exports as it would directly translate to a fall in the duty entitlement passbook premium and erode exporters margins.

The delegation also sought removal of value cap in respect of carpets since it was creating hurdles in the manufacture and export of high value hand-made carpets.