Kolkata: In the upcoming Union Budget, engineering exporters have sought fiscal relief, including income tax exemptions and further support for the MSME sector. The plea came in the backdrop of slowdown in the global economy and “protectionism rearing its head”, the Engineering Exports Promotion Council (EEPC) said. Also Read - 7th Pay Commission Latest News: Karnataka Govt Employees to Get 4.75% DA Hike Ahead of Diwali
EEPC Chairman Ravi Sehgal said Indian engineering exports are facing tough times because of high input cost, issues with GST, lack of finance for MSMEs and sluggish global economies. Also Read - Direct Tax Target Realistic, Achievable: Revenue Secretary Ajay Bhushan Pandey
EEPC India, in its pre-budget presentation to the finance ministry, has demanded income tax exemption on profits derived on the transfer of export incentive scrips like MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme). Also Read - 50 Days of Modi 2.0: NDA's Second Term Indicates Huge Transformation For Next 5 Years
“These incentives have been given by the government to offset certain major handicaps of exporters like high freight costs; to make Indian products competitive in global markets, etc. Thus, if these are taxed, then the whole purpose of providing the incentives is defeated,” EEPC said in the memorandum.
It also said that certain key segments of engineering exports continue to suffer from the inverted import duty, creating disincentives for value-addition.
The sudden withdrawal of GSP by the US will have an adverse impact on the products exported from India under the programme, which are mostly manufactured by the MSMEs, EEPC said.
The government should provide some fiscal support for the labour-intensive MSME sector, it said.
(With PTI inputs)