IEEMA, the country’s apex association of manufacturers of electrical, industrial electronics and allied equipment, expects the government to increase the competitiveness of the domestic electrical equipment industry by announcing a slew of measures in the Union Budget 2019 to be tabled in the Parliament by the newly-appointed Finance Minister Nirmala Sitharaman on July 5.
“It is high time for the government to increase the competitiveness of the domestic electrical equipment industry by reducing the cost of manufacturing through favourable tax structure; quality infrastructure; availability and controlling the landed cost of necessary imported raw materials & components. The high cost of finance is another area of concern, especially for the SME segment, with limited funding options, given its appetite for working capital,” IEEMA president Harish Agarwal.
According to Agarwal, there should be zero Basic Customs Duty on imports of CRGO Steel and Amorphous Alloy Ribbon, till the time these are produced indigenously. Since neither of these materials is manufactured in India, now there is no one to be protected in the form of Basic Customs Duty.
Sunil Misra, director general, IEEMA added, “We also recommend for the abolition of MAT and reduction in corporate and personal income tax as these steps would help in increasing consumption and in turn promote economic growth. Quick refund mechanism for all embedded taxes and duties in the entire value chain under GST is another key to promote sustainable growth of the industry.
Finished electrical equipment (largely under Chapter 84 and 85) attract basic customs duty, ranging from 7.5% to 10%, while the same product is also imported at a concessional basic customs duty of 5%, under the Project Imports, bringing in disadvantage and lack of level playing field for the domestic industry. The domestic industry needs to be given equivalent benefits to compete for these concessions.”