Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARD :: due date for vat payment :: list of goods taxed at 4% :: ARTICLES ON INPUT TAX CREDIT IN VAT :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: empanelment :: VAT Audit :: form 3cd :: articles on VAT and GST in India :: Central Excise rule to resale the machines to a new company :: VAT RATES :: TDS
 
 
« Service Tax »
 GST delay to impact Budget
 If GST not rolled out by Sept, there won't be taxation in country, warns Jaitley
 India’s E-Service Tax Will Add To Foreign Content Providers’ Woes
 GST Council to discuss model laws, tax jurisdiction today
 Tax Invoice Under GST
 Insurance may fall under 12% tax slab in GST, from 14% service tax currently
 GST draft makes it must for companies to pass tax benefit to consumers
 To speed passage, Government plans GST Bills as money Bills
 No service tax on train tickets booked through IRCTC till December 31
 GST Council meet postponed to December
 Banks integrating systems with RBI, GST Network to collect tax: Arun Jaitleya

Export risk management guide for SMEs on anvil
June, 02nd 2008

By TIOL News Service

THE Federation of Indian Micro and Small & Medium Enterprises (FISME) has proposed a study on risks faced by SMEs especially in securing payments from overseas customers.

The study would later be published as a guide to help SMEs export directly their products and services by effectively managing export risks.

FISME is commissioning the study under the SME component of a project titled Strategies and Preparedness for Trade and Globalisation in India. The project is a joint initiative of Ministry of Commerce & Industry, United Nations Conference on Trade and Development (UNCTAD) and UK Department of International Development.

The guide is intended to identify the enormity of risks especially in securing payments for products and services delivered to overseas customers. Many SMEs shy away from exporting directly their products and services in view of difficulties in getting payments from customers. They thus prefer to export through trading houses and other entities.

The latest census on small scale industries (SSIs) shows that only 0.5% of SSIs are actually engaged in exports. SSIs, however, account for more than 7% of gross domestic product and 40% of industrial production.

Similarly, SMEs direct contribution to the countrys total exports is 35%. They also contribute significantly to indirect exports channeled through trading houses, etc.

The proposed study titled Guide for SMEs: Managing Risks and Securing Payments in Exports would be prepared by a consultancy firm to be selected through competitive bidding.

According to study brief, breaking into new markets and supplying to established buyers is extremely difficult. The break to SMEs is generally given by second rung buyers many a times whose credit reports are either not available or not very encouraging. In either case, the export insurance covers for such buyers are not available.

Most overseas buyers do not open letter of credit in favour of a new small supplier. They offer to make payments under mechanisms such as delivery against acceptance (DA), delivery against payment (DP), telegraphic transfer (TT) after receipt of goods, cash against documents through bank, etc.

The brief notes that all such payment terms contain higher risk and unduly favour the buyer. The insurance policies either do not accept these conditions or charge hefty premium. Most SMEs find the insurance policies as too cumbersome and prohibitively expensive.

SMEs find cost of recovering bad debt through standard legal means as too expensive to be employed. Most of them quietly bear the brunt of bad debt and many never return to export again.

The brief says that one bad debt could lead to closure of small firm due to its inability to absorb payment default.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Software Work Flow Workflow Software Software Automation Workflow automation Software Design Workflow Design Business Work Flow Workflow automation tools

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions