KOLKATA, Nov 28: In a pre-Budget presentation to Union Finance Minister Arun Jaitley, EEPC India chairman P K Shah has suggested that all assistance provided through export promotion schemes should not be taxed.
EEPC India, an apex organization of engineering goods exporters, demanded that all assistance provided through export promotion schemes should not be taxed and should be exempted u/s 10 of the Income Tax Act in respect of consideration derived against duty credit scripts such as MEIS and SEIS.
“It is a Reward Scheme given to the exporters in the form of incentives. Presently these incentives are taxed at the normal rate of 33 per cent and exporters are getting benefits discounted at 67 per cent. So the purpose of giving incentives is not fully met,” Mr Shah clarified.
He also suggested that automatic refund mechanism of all taxes and duties against exports should be through direct credit to the bank account including GST.
As such GST scheme of value-taxation chain was important that the refund system should be automatic as the exports are zero rated.
He also called for creation of technology Upgradation Fund Scheme for the MSME engineering sector and enhancement of limit in Plant and Machinery for MSME.
The need to move up the value chain was critical for India’s engineering exports.
Given that 40 per cent of engineering exports come from the MSME sector, it was an indispensable pre-requisite to set up a Technology Upgradation Fund Scheme which provides access to funds for technology upgradation at low cost.
It was suggested that a provision of Rs 1000 crore be provided in the Union Budget for a Technology Upgradation Scheme for the MSME engineering sector.
For definition of the medium scale firms, the upper limits of investments in plant and machinery should be increased to Rs 30 crores from the present limit of Rs 10 crores by passing the MSME Amendment Bill, 2015 placed in Parliament. (AGENCIES)
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