New Delhi, June 7 (KNN) The MSMEs should get some attention from the new Government at the Centre as indicated by the issues listed by the Finance Ministry received from different sectors of the industry during the pre-Budget consultations done by Finance Minister Arun Jaitley here yesterday.
A host of suggestions and demands were received and discussed during the consultations, according to an official release. These included revision of reservation list of items reserved exclusively for manufacture in MSME Sector, discourage import of items produced by low cost machineries through effective taxation policy, monitoring of items relating to MSME Sector, imported from neighbouring countries under SAFTA and stringent action to discourage the same.
Other suggestions include removal of 2 per cent duty on bicycle which is highly eco-friendly and fixing of floor prices in case of imported bicycles , imposition of import duty on bicycle and its parts not less than 40 per cent to arrest cheap imports and introduction of a ‘Technological Up gradation Fund Scheme’ to help bicycle industry in the country.
The industry bodies also suggested promotion of women enterprises in the country which is at present about 4 per cent only and therefore, women enterprises particularly in MSME Sector be given exemption from taxes at least for two years.
“Since MGNREGA is affecting the industries and therefore, be reserved for elderly people and women as they can’t migrate whereas youth should be given skill development training in the industries,” the industries suggested.
The industry also proposed investment linked incentives to be allowed without any threshold limit to benefit MSME as present threshold limit of Rs 100 crore apply only to large industries; introduction of technological up gradation allowance; scrap TDS on payments made u/s 195 of the Income Tax Act 1961; exemption of exports from Service Tax; Service Tax exemption for services sought abroad under Reverse Charge Mechanism (RCM) such as brand promotion and advertising services etc.; Service Tax exemption for EPCs/FIEO; excise duty exemption slab for SSI units be increased from Rs 1.50 crore to Rs 3.00 crore; exports be brought back under priority sector lending; extension of Interest Subvention Scheme to all sectors and merchant exporters ; and creation of Export Development Fund with a corpus of minimum 1 per cent of the preceding year’s exports among others.
Further, the industry bodies also listed out demands of lowering of tax rates, easing of gold import curbs, clarity on retrospective tax law amendment and early roll out of Goods and Services Tax (GST) and Direct Taxes Code (DTC).
“The economic situation at present is quite challenging but there is enthusiasm among the industry to turn it to its advantage. There is need to give directional thrust to translate the same into better results,” a statement from the finance ministry later said, quoting Jaitley. He further said it was a "constructive meeting".
The meeting was attended by ministers of state Nirmala Sitharaman and Ratan P Watal and other officials.