New Delhi: Engineering exporters are hoping that the upcoming budget will entail decisive fiscal measures which would act as a stimulus to revive business sentiment that has been hit post demonetisation.
In a representation submitted to Finance Ministry, engineering exporters' body EEPC India has suggested that exemption be provided under the Income Tax in respect of the profits derived by exporters on transfer of all types of incentive scrips such as those under Merchandise Exports under India Scheme (MEIS) and Service Exports under India Scheme.
It also sought a Technology Upgradation Fund Scheme for the MSMEs in the engineering sector.
"Given that 40 percent of engineering exports come from the MSME sector, it is an indispensable pre-requisite to set up a Technology Upgradation Fund Scheme which provides access to funds for technology upgradation at low cost. It is suggested that a provision of Rs 500 crore be provided in the Union Budget for a Technology Upgradation Scheme for the MSME engineering sector," EEPC India said.
Besides, with GST on the anvil, the export promotion schemes are likely to affected as it is still not clear about the impact of SGST on these schemes. It is therefore requested that all taxes in the export chain be refunded to the exporters directly to their bank accounts, it suggested.
The body's Chairman T S Bhasin hoped that Finance Minister Arun Jaitley would unveil a special package for the exporters in the form of both fiscal incentives and procedural de-bottlenecks in the budget.
"Budget would be critical to revive investment sentiments followed by introduction of the Goods and Services Tax which will further ensure that the entire value chain in the economic activity is integrated and mapped electronically through the GST Network," Bhasin said.
He said while the 'new normal' would lead to some adjustment problems particularly for the small and medium enterprises, especially those dependent on cash for daily
operations, the government should invest heavily in digital infrastructure since cash as a percentage of GDP is expected to halve from the present 12 per cent in the next three years.
In the long run, Bhasin said digitalisation of the economy and transparency in the government machinery and business paradigm would be beneficial.
"Transparency and the value chain integration should help ensure the ease of doing business and reducing the transaction costs for the domestic industry and those who are engaged in highly competitive export sector," he said.
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Updated Date: Jan 14, 2017 19:59 PM