CICU submitted Pre- Union Budget 2015-16 proposals to Finance Minister for Uplift of Trade & Industry

Ludhiana, January 19, 2015: The first full Union Budget 2015-16 of NDA Government led by Narinder Modi, Prime Minister is to be presented by Arun Jaitely, Finance Minister on February 28.

Taking into consideration the present economic scenario, Avtar Singh (President) and Upkar Singh Ahuja (General Secretary), Chamber of Industrial and Commercial Undertakings (CICU), Ludhiana after detailed discussions held in the Executive Committee Meeting comprising prominent industrialists and captains of affiliated associations, have requested and urged upon the Union Finance Minister for consideration of Pre-Union Budget proposals as under:

1.     Providing relief under Income Tax

a)        Already our tax rate is higher as compared to progressive countries. Lowering Tax slabs from 20% to 15% and 30% to 25% will increase Tax Revenue and also enhance tax payers base.

b)        Income Tax exemption limit should be increased to Rs. 3.00 Lac for general Tax payers and 4.00 Lac for senior citizens.

c)         Entire interest income from all sources for Senior Citizens should be exempted from Income Tax.

d)        Limit u/s 80C should be enhanced to at least Rs. 2.00 lacs. Investment made under R & D should be given deduction under 80 C of Income Tax Act.

e)        There is no limit prescribed under section 206C for deduction of TCS on scrap. Specified limit for TCS deduction will help to reduce the hardships being faced by small traders and to reduce paper work without any loss to the revenue.

f)          The Monitory Limit under Section U/S 44AB of the Income Tax Act for mandatory tax audit should be linked to cost inflation index. Therefore this limit should be raised to at least to Rs. 2.5 Crore in case of turnover and Rs. 60.00 Lac in case of professional receipts. Further U/S 44AD 8% of gross turnover/receipts should be reduced to 6% of gross turnover/receipts.

2.        Speedy implementation of G.S.T.

This will replace the Multi Tax System prevalent in India since long and will bring uniformity in Tax Structure. This would improve the Tax Administration while bringing transparency in the system.

3.        Higher Capital limits for Manufacturing & Services Proposed by MSME Ministry Should Be Implemented With A Cap That Multi National Companies Are Not Categorized In Medium Category.

For Manufacturing Sector the proposal suggests as under.

 

a)        For Micro Enterprises doubling the capital ceiling from Rs 25 lakh at present to Rs 50 lakh.

b)        For Small Enterprises to hike the limit from Rs 5 crore to Rs 10 crore.

c)         For Medium Enterprises doubling the limit from Rs 10 crore to Rs 20 crore.

For Services Sector the proposal entails as under.

For Micro Enterprises doubling the investment limit in plant and machinery from Rs 10 lakh to Rs 20 lakh.

a)     For Small Enterprises, raising the limit from Rs 2 crore to Rs 5 crore.

b)     For Medium Enterprises the limit from the present Rs 5 crore to Rs 10 crore.

The proposed limits should be implemented with a cap that Multi National companies are not categorized in Medium Category to safeguard and protect the MSME Sector.

4.     Providing Relief in Central Excise Duty.

a)     The prices of input have increased manifolds leading to hike in unit cost therefore Central Excise Exemption limit for MSMEs should be enhanced to Rs. 5.00 Crore.

b)      Waiver of Excise Duty on Eco-friendly Bicycles and Sewing Machine which are poorest person common use consumables.

5.     Modifying Credit Linked Capital Subsidy Scheme (CLCSS) for Technology   Up-gradation of Micro and Small Enterprises

Ministry of Micro, Small and Medium Enterprises is operating this scheme which was launched in October-2000 and revised on 29.9.2005. Taking into consideration the current Capital Cost of Machinery this Scheme needs modification as under.

a)     The existing 15% capital subsidy limited to maximum Rs.15 lakhs should be enhanced to Rs. 50 lakhs for purchase of Plant & Machinery.

b)     Subsequently Maximum limit of eligible loan for calculation of subsidy under the scheme should be increased from Rs.100 lakhs to Rs. 500 lakhs.

c)      Purchase of second hand machinery where no substitute is available should be included.

6.     Allocation of More Funds under Marketing Assistance Scheme to National Small Industries Corporation Ltd.

As per available information, no Industrial Association in entire Punjab State during current Financial Year has been provided Financial Assistance for organizing Industrial Exhibitions in respect of MSMEs belonging to general category under Marketing Assistance Scheme.

Please allocate sufficient funds under MAS Scheme to NSIC Ltd. so that Micro and Small units of Punjab State  are not deprived of participation in Industrial Exhibitions, urged the CICU. It also sought to allocate funds in future on State wise basis so that MSMEs of a particular state like Punjab should not suffer and get the adequate benefits for their growth and development in this competitive era.    

7.     Providing Sops for Export Industry.

To boost exports, exporters should be granted following incentives.

a)     Exemption from all Indirect Taxes.

b)     Granting 5% increase under Duty Drawback Scheme.

8.     Low Cost Automation Incentive/Subsidy Scheme should be Introduced for Micro & Small Industry.

9.     Granting Special Incentives to Punjab at par with Neighboring States.

a)     Fiscal incentives being given to Neighboring States i.e. Uttranchal, H.P., and J & K should also be provided to Punjab.

b)     Punjab State is situated for off from ports therefore MSMEs have to incur more expenses for import of raw material and export of finished goods. The prices of steel, cement, coal & petroleum products should be same throughout India by introducing freight equalization system.

10.Import of Under Billing Chinese Goods Should be Plugged to Save Domestic MSME Industry.

Minimum floor price of Chinese goods being routed to India through Sri Lanka, Bangladesh & Nepal should be fixed instead of declared invoice value for levying Custom Duty.

11.Reduction of Lending Rates is Imperative for Industrial Momentum Picking up

RBI should be advised to Lower Lending Rates which hold the key to produce, support

and invest in industrial sector.

12.Appointing Steel Regulatory Authority for Monitoring Domestic  Steel Prices   Please de-link domestic steel prices from international prices by appointing Steel Regulatory Authority for monitoring prices on cost based analysis otherwise big Indian steel makers would continue to exploit the situation. This measure is of paramount importance for survival of MSME industry, which is one of the vital cogs in the economic development of our country.

13.Mahatma Gandhi National Rural Employment Guarantee Act- 2005 (MGNREGA) Scheme Should be Linked with Productivity

Presently ideal and inefficient workers are also getting benefits which should be totally discouraged by linking this scheme with productivity.