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MAIT President Meets FM Arun Jaitley, Proposes Pre-Budget Recommendations

President of MAIT, Nitin Kunkolienker during an extensive exchange of dialogue with Union Finance Minister, Arun Jaitley re-emphasized industry recommendations

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President of MAIT, Nitin Kunkolienker during an extensive exchange of dialogue with Union Finance Minister, Arun Jaitley re-emphasize don following recommendations to be included in the upcoming Union Budget 2018-19 under 4 key broad areas:

  • Promoting Manufacturing and Demand under “Make in India”
  • Revisiting GST rates
  • Improving “Ease of Doing Business”
  • Deferring RCEP-Regional Comprehensive Economic Partnership

Recommendation No 1: Promoting Manufacturing and Demand under “Make in India”

  • BCD intervention for non ITA Goods
    • BCD of 25% and above should be imposed on all non ITA items– As 10% duty arbitrage doesn’t provide sufficient differential to manufacture.
    • Components which ever is possible should be levied at least 15% BCD– Select non ITA components as plastic molded, metal and rubber parts which have capacity to be indigenously manufactured should be under at least 15% BCD
    • Prohibiting SKD imports we should bring Populated PCB should be in par with finished goods and be charged 25% BCD and hence exemption available for parts should exclude Populated PCB. This will not only help in substantial value addition but also help in meeting PMA requirement which is irrelevant due to low cost import from china. This will eventually provide volume and increase export potential of electronic goods
  • GST refund for ITA Goods –The benefit of upfront exemption from levy of CGST/IGST be provided on the goods manufactured and sold in India; or the benefit may be extended by way of a refund mechanism wherein refund of CGST would be available to manufacturers in line with section 10 of the GST Act.
  • Income tax holiday under section 80 IB for the electronic Hardware units promoting design led growth for a period of 5 years, who meet minimum 30% domestic value addition norms.
  • Increasing demand for Make in India
  • Depreciation Benefit for corporate users-The ITA goods procured by the corporates/entities in India, which are manufactured in India under “Make in India” programme with substantial value addition (minimum 30%), be allowed a depreciation of 100% as against 60% currently.
  • Rebate for Salaried class– For Individual buyers of Desktops/Laptops, an amount of INR 10,000/- or 25% of the cost of the purchase, whichever lower be allowed as deduction under 80C, in addition to the existing limit.

Recommendation No 2: Revisiting GST rates: GST rates should be at 18% for all ITA and non-ITA products GST rates for Projectors and monitor irrespective of size should be at 18%

Recommendation No 3: Improving “Ease of Doing Business”

  • “Setting up Component Hub” till the component manufacturing ecosystem stabilizes- The importing of goods into the bonded warehousing, clearance and its valuation is governed by the Customs Valuation Rules, the Warehousing Regulations, the Foreign Trade Policy & the FEMA regulations and certain key changes shall be required in each of these regulations for accommodating the concept of Component Hubs.

Recommendation No 4: Deferring inclusion of electronics in RCEP before the ecosystem stabilize

  • Deferring inclusion of electronics in RCEP before the ecosystem stabilize-Inclusion of electronics in RCEPs will undo the little that is achieved, paralyze the entire chain of efforts undertaken by Government and momentum achieved by the industry. It will be sort of providing backdoor entry to all 80-90% of the imports from the countries which are signatories to ITA-II

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