Engineering exporters seek fiscal relief in Budget

 Kolkata, 2 July (HS) : In view of the current slowdown in the global economy and protectionism rearing its head in major economies of the world, Engineering Export Promotion Council(EEPC) of India, the face of the country’s engineering exporters, has  sought a fiscal relief from the Union Finance Minister through the presentation of her maiden budget on 5 July.

Submitting its pe-Budget presentation to the Finance Ministry today, the EEPC India said as engineering exporters, contributed about one-fourth of the country’s  basket of merchandise exports ,they sought that income tax exemption should  be provided on the profits derived on transfer of export  incentive scrips like Merchandise Exports from India Scheme (MEIS) and Service Exports from India Scheme(SEIS).

In their presentation to Union Finance minister Nirmala Sitaraman they said ‘’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.

‘If these are taxed then the whole purpose of providing these incentives are defeated as only 66 per cent of the benefit accrues to the exporter’, the EEPC India sources quoting its Chairman Ravi Sehgal told Hindusthan Samachar here today.

He said certain key segments of engineering exports continued to suffer from the inverted import duty and creating disincentives for value-addition.

For instance,he said, the inverted or uniform custom duty structure and on value added Cold Rolls products would  lead to import of downstream Cold Rolled products and manufactured products dampening the downstream industries.

Underscoring the importance of fiscal incentives for Research and Development for improving the value chain of exports,Sehgal said ‘ R and D  is the backbone for sustained growth of any Industry.’

‘This will help to develop new products, and compete with other international players’, he said adding currently, any import for R and D was subject to payment 5 per cent duty with lot of paper work and approvals.  ‘This actually hampers the research work of any organization’, he said and felt that the  import duty for the purpose of Research and Development should be zero, so that more and more investment could come in this sector’ .

Moreover, Sehgal said,as Indian engineering exports were already in through a tough time because of high input cost, issues with GST, lack of finance for MSMEs and sluggish global economies, it would falter again if no corrective steps were taken without delay.