PRE-BUDGET MEETING: FASII leadership holds discussions with Union Ministry of Finance

Ludhiana/ New Delhi, December 12: Federation of Association of Small Industries India (FASII) was invited by the Union Ministry of Finance on the December 11 here, for a Pre-Budget Meeting.

Sumit Bose, Secretary (Revenue), chaired the meeting. 

Dr. Poonam Kishore Saxena, Chairman, Central Board of Direct Taxes (CBDT), Dr. Sudha Sharma, Member, CBDT, Pragya Sahay, Joint Secretary CBDT, Praveen Mahajan, Chairman, Central Board of Excise and Custom (CBEC), Sheila Sangwan, Member, CBEC, P.K. Mohanty, Joint Secretary, CBEC and other Senior Officers from CBDT and CBEC were present in the meeting.

Owing to disinclined health conditions, FASII’s National President Badish Jindal could not participate in the meeting.  However, FASII and its National President were represented by FASII’s Vice President (Northern Region) Narinder Miglani who is also the General Secretary of Knitwear Club, Ludhiana,  and by FASII’s one of the Senior Members Darshan Dawar who is the President of Knitwear Club, Ludhiana.

Narinder Miglani, at first, stated that the imposition of Excise Duty on readymade garments done vide Union Budget 2011 was a violent shocker as it brought duty as well as paper-work on the small enterprises. The imposition of duty, he said, had also hit upon the cost-factor of the industry.  He therefore sought withdrawal of excise duty from the knitwear industry.

Further, Miglani disclosed that at present cheap garment imports were flooding from China, Bangladesh and Srilanka which, he said, posed extreme threat to the industry. The knitwear industry, he said, was unable to raise the price of its products owing to such cheap imports. He therefore wanted effective measures to arrest the cheap imports from the said countries.

The Central Excise Registration, Miglani said, was optional for yarn manufacturers.  However, all the yarn manufacturers were not having Central Excise Registration.  This had resulted in loss of CENVAT on raw-material for knitwear. 

Miglani, therefore, suggested that either central excise registration should be made optional for knitwear or it should be made mandatory for yarn manufacturers.

As regards the Bicycle Industry, Narinder Miglani thanked the government for having given a very good support to the Bicycle Industry by increasing the import duty on parts by 20% and the whole Bicycle by 30%.  However, he brought to the notice of the Revenue Secretary that now China, Bangladesh and other South Asian countries were sending materials at under-invoice which, he said, resulted in extreme loss to the industry as well as to the government. He, therefore, suggested that the import duty on Bicycle and parts be enhanced to atleast 40% and that the Bicycle and Parts be kept in the Negative List of the SAFTA.  Further, he sought that the floor price on imported Bicycle should be fixed at more than Rs.150/- per KG.

This, he said, would arrest cheap imports and save the industry from their dire straits. He also voiced for withdrawal of central excise duty on the complete Bicycle.

Further, stating that the steel industry was the main engine of the Engineering Sector and disclosed that in India, majority of scrap was being generated from the central excise exempted units. These units, he said, could not pass the cenvat credit to the buyers.  Therefore the secondary steel producers showed no interest in buying their scrap which Miglani said, resulted in the sale of such scraps in black market.  He therefore wanted provision of deemed credit on such scraps and said that the revenue from value addition could be generated by the Central Excise department.

Miglani felt that as per rough estimate there could be an increase in 10% of total revenue from this aspect.

Also, Miglani said that Wire Drawing had now been declared as a manufacturing process in the previous budget.  He, however, brought to the notice of the Revenue Secretary that 95%  of these units came under MSME sector and the value addition in this sector was not more than 1%.  Therefore, he requested that this sector should be kept exempted from the Central Excise or an optional facility  be given to this sector.

Miglani further wanted that keeping in view the skyrocketing prices of raw-materials and allied services including Electricity, telephone etc., the central excise exemption limit needed to be increased to Rs.3 crores from the present limit of Rs.1.5 crore.

Regarding SAFTA, Miglani said that products of Micro & Small Enterprises(MSE) have started coming through imports from Bangladesh under SAFTA.  This, he said, had terribly hit the domestic Micro and Small Enterprises.    Further, with effect from 1st April, 2013, imports from Pakistan would be allowed under 5% import duty. 

Miglani cautioned that Chinese items, undoubtedly, would be dumped through Pakistan.  He, therefore, requested that efforts should be made to curb such imports