EEPC Expects Financial Relief from This Union Budget

Under the aegis of EEPC India, engineering exporters, who contribute about one-fourth of the country’s basket of merchandise exports, have sought fiscal relief from the Finance Minister Nirmala Sitharaman through her maiden budget, in the backdrop of slowdown in the global economy and protectionism rearing its head in major economies of the world.

In its pre-budget presentation to the Finance Ministry, the EEPC India has demanded that income tax exemption should be provided on the profits derived on transfer of export incentive scrips like MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme).

‘’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 these incentives are defeated; only 66% of the benefit accrues to the exporter’’, the EEPC India memorandum stated.

It also said that certain key segments of engineering exports continue to suffer from the inverted import duty, creating disincentives for value-addition. For instance, inverted/uniform custom duty structure on HRC <10/12.5%> and value added CR products (12.5%) lead to import of downstream Cold Rolled products and manufactured products dampening the downstream industries.

Accordingly, the Custom duty on HR coils be reduced by minimum 5% and be revised to 5/7.5%, it added.

Likewise, the apex organization of the engineering exporters said, for improving the value chain of exports, research and development should be given fiscal incentives.

It explained that R&D is the backbone for sustained growth of any Industry. This will help to develop new products, and compete with other international players.

Currently, any import for R&D is subject to payment 5% duty with lot a paper work and approvals. This actually hampers the R&D of any organization. It is suggested that import duty for R&D purpose should be zero, so that more and more investment can take place in this sector, suggested EEPC India.

EEPC India Chairman Ravi Sehgal said, Indian engineering exports are already going through tough time because of high input cost, issues with GST, lack of finance for MSMEs and sluggish global economies etc. Engineering exports have been faltering in recent months.