Manufacturing Boost is expected in Budget 2015

SMEStreet Desk
New Update
Manufacturing Boost is expected in Budget 2015

Considering the activity of last 9 months, there are several programs initiated which are deisgned to uplift the manufacturing industry. 'Make In India' is an example of Modi Government's priorities. According to  Confederation of Indian Industry (CII), for the success of ‘Make in India’, Budget 2015-16 should avoid the temptation of raising excise duties.

‘While we understand the imperative to garner fiscal resources, CII feels that demand is still fragile. Moreover, the manufacturing sector continues to be vulnerable. Under these circumstances, it would be prudent to allow excise duties to remain at current 12 per cent,’ stressed Mr Chandrajit Banerjee, Director General, CII.

Further, CII hopes that GST would be implemented at the earliest keeping in mind that it should subsume all taxes, be applicable to all products and services, and involve a reasonable Revenue Neutral Rate (RNR). ‘CII believes that industry should be allowed to participate in the Task Force on RNR and other significant issues such as Integrated GST, Place of Supply Rules and draft GST legislation,’ said Mr Banerjee.

The general rate of excise duty has been raised and lowered in conjunction with prevalent economic conditions and stands at 12 per cent as of now. To provide a stimulus to the manufacturing sector, excise duties on automobiles, capital goods, consumer durables, and so on were lowered in February 2014, but this rebate expired in December, 2014. However, demand continues to be weak, said CII, while adding that reduction in rates was desirable but may not be aligned to Government’s fiscal situation.

CII has also advocated for reduction in excise duty on automotive parts where the applicable rate is higher than that applicable on the automobiles, thus leading to anomalies. It has also called for reduction in excise rates on various goods including Active Pharmaceutical Ingredients (API), fly ash products, packing materials for food processing industry, etc.

Regarding customs duties, CII maintains that peak rates should be retained at current 10 per cent. ‘Lowering peak customs duties will act against the ‘Make in India’ campaign,’ noted Mr Banerjee. ‘Many products already attract lower rate of customs duty. Further, due to free trade agreements, concessional rates are applicable to a large range of goods coming from countries like Malaysia, Thailand, ASEAN, and others.’

CII has also listed out products where customs duty structure anomalies still exist, including cast components for wind operated electricity generators, metal parts of electrical insulators, naphtha and liquefied butane inputs, etc. The trade agreements too lead to a large number of inverted duty structures.

There is need to exempt 4 per cent Special Additional Duty of Customs (SAD) on certain metal scraps, while SAD should be imposed on all projects which involve import of capital goods to counterbalance domestic taxes. CII has called for duty reduction on several key products, including LNG, coking coal, wine, and parts for air conditioners and safety equipment, among others.

On Central Sales Tax, CII has requested for reduction in rate from 2 per cent to 1 per cent in view of delay in implementation of GST.

The services tax rate should be maintained at current 12 per cent, said CII.

SMEs CII Manufacturing SMEs Manufacturing Industry Budget 2015 Budget Wishlist