New Delhi: Reinstatement of a key export incentive to 4%, lowering of goods and services tax (GST) on entry-level mobile phones and support to local phone manufacturers topped the budget wishlist for the IT and electronics industry. Representatives from Apple, Uber, Paytm, WiproNSE 0.45 %, Reliance Jio Infocomm, IIM and ISB, and associations including MAIT and Nasscom attended finance minister Nirmala Sitharaman’s pre-budget consultations. electronics industry. Representatives from Apple, Uber, Paytm, WiproNSE 0.45 %, Reliance Jio Infocomm, IIM and ISB, and associations including MAIT and Nasscom attended finance minister Nirmala Sitharaman’s pre-budget consultations. “Electronics industry exports will be highly dampened; (this will) have a negative impact on investments. Reinstating the Merchandise Exports from India Scheme (MEIS) is the need of the hour,” said George Paul, chief executive, MAIT.
The government has reduced MEIS benefit to 2%, from 4%, from 2020, which the industry said would have an immediate crippling effect on exports. The ministry of IT and electronics has also sought a reversal from the finance ministry. “Good coordination between ministries on policy measures is required to ensure quicker resolution of industry issues,” Paul added.
“Incentives package for global value chains in production - so as to bring India at a par with the likes of Vietnam - were also brought to (the ministry’s) notice,” said an executive who did not want to be named. Sources added that companies such as Uber have sought for removal of the 1% deduction in tax on payments to suppliers under the GST regime, while demands were also made for allowing setoff through input tax credit (ITC) of the 5% GST levied on transport companies.
The finance minister has also sought recommendations for the upcoming budget from the general public through the MyGov app. Other issues included using big data for SME technology, public governance and tax sops to startups. Suggestions regarding incentives for encouraging setting up of data centres and fiscal incentives for data localisation were shared. “Discussions around incentives for pushing digital penetration in rural areas, credit guarantee and tax exemption to startups for competing with other nations, rationalisation of minimum alternate tax rate, besides creation of specific agency for looking after crossborder financial crimes, also took place,” said a statement.
Source: economictimes.indiatimes.com