homefinance NewsBudget 2023: Electronic industry seeks manufacturing scheme extension, Customs duty & GST relaxations
Budget 2023: Electronic industry seeks manufacturing scheme extension, Customs duty & GST relaxations
“The Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) is due to expire in March 2023 and should be extended by 5 years with additional allocation of 10,000 crores,” the electronic industry has proposed to the government ahead of Union Budget 2023.
The Electronic Industry has requested the government for five-year extension to the Scheme for Promotion of Manufacturing of Electronic Components and Semiconductors (SPECS) with an increased outlay of Rs 10,000 crore in the Union Budget for 2023-24.
“The SPECS scheme is due to expire in March 2023 and should be extended by 5 years with additional allocation of 10,000 crores,” it said.
To boost global trade and enhance India's competitiveness, the industry has also sought an overhaul of existing tariff structure to reduce the impact of pandemic. It said that the current tariff structure is hurting competitiveness against countries like Vietnam, Thailand, and Mexico. Customs duty relaxations on the import of supplies will strengthen domestic capabilities and improve domestic efficiencies and enhance India’s competitiveness, it said.
Industry stakeholders said that a large quantum of funds stuck in the Input Tax Credit Ledger is causing a lack of liquidity and have emphasised the need of faster dispute resolution of pending tax cases.
The industry also wants the existing 18 percent GST on mobile phones to be lowered to 12 percent, as it is acting as a deterrent to digital adoption. It laid emphasis on adoption of said tax slab as that will help in the faster migration from feature to smartphones.
In its recommendations for Customs duty on mobile phones, the industry has sought an exemption on high-end phones — reduce the Customs duty cap to Rs 4,000 on smartphones priced above 20,000. The current duty rate is 20 percent.
In 2019, Finance Minister Nirmala Sitharaman had proposed to raise the annual turnover limit from Rs 250 crore to Rs 400 crore for availing a lower corporate tax rate of 25 percent. Ahead of this Union Budget, the electronic industry has proposed a further extension in the current turnover of Rs 400 crore for MSMEs. This will allow the MSMEs to claim once signal income tax rate of 25 percent, it said.
The Finance Minister will present the last budget of the NDA 2.0 government in Parliament on February 1, 2023, amid geopolitical uncertainties and headwinds in the form of high inflation and sluggish economic growth.
Also Read: Budget 2023: A stable and predictable tax environment is imperative to boost investor sentiment
First Published: Dec 30, 2022 4:30 PM IST
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