Finance Minister Nirmala Sitharaman will unveil the full budget for the fiscal 2019-20 on July 5. (File Photo)
Engineering exporters have sought fiscal relief in the upcoming Union Budget, including income tax exemptions and further support for the MSME sector. The plea comes in the backdrop of slowdown in the global economy and “protectionism rearing its head” in major economies, the Engineering Exports Promotion Council (EEPC) said in a statement on Tuesday. In its pre-budget presentation to the finance ministry, EEPC India has demanded income tax exemption on profits derived on transfer of export incentive scrips like MEIS (Merchandise Exports from India Scheme) and SEIS (Service Exports from India Scheme).
“These incentives have been given by the government to offset certain major handicaps of exporters like high freight costs; to make Indian products competitive in global markets, etc. Thus, if these are taxed, then the whole purpose of providing the incentives is defeated,” EEPC said in the memorandum.
It also said that certain key segments of engineering exports continue to suffer from the inverted import duty, creating disincentives for value-addition.
EEPC Chairman Ravi Sehgal said Indian engineering exports are facing tough times because of high input cost, issues with GST, lack of finance for MSMEs and sluggish global economies.
The sudden withdrawal of GSP by the US will have an adverse impact on the products exported from India under the programme, which are mostly manufactured by the MSMEs, EEPC said.
The government should provide some fiscal support for the labour-intensive MSME sector, it said.
Finance Minister Nirmala Sitharaman will unveil the full budget for the fiscal 2019-20 on July 5.