Financial Daily from THE HINDU group of publications
Tuesday, Nov 25, 2003
Industry & Economy
Kerala SSIs urge Centre to cut excise, customs tariffs
Sajeev Kumar V.
Kochi , Nov. 24
THE Kerala State Small Industries Association has submitted a pre-Budget memorandum to the Union Government seeking relaxations in the central excise and customs tariffs for the SSI sector in the forthcoming Union Budget.
The State President of the Association, Mr Xavier Thomas Kondody, said that central excise exemption for SSI at Rs 100 lakh should be retained and the eligibility criteria of the previous years clearance should be raised from the present Rs 300 lakh to Rs 500 lakh. This benefit should be extended to SSI units manufacturing products on other's brand without location restrictions.
He said the Central Excise is normally felt by small units as an avoidable nuisance more due to harassment under inspector raj than meeting the tax liability. It should be made optional for tiny units who are practically unable to operate Cenvat credit.
The Association has suggested various measures for the benefit of the SSI sector, which included exemption of all agri products including rubber wood used as raw material from central excise, notional credit at normal tariff for purchasers of SSI product to provide market edge for SSI products etc.
The Association demanded total exemption from central excise on products manufactured from rubber wood with a content of minimum 75 per cent.
There are minimum 500 units in Kerala, which are making veneer of plywood using rubber wood as prime raw material. Referring to Customs duties and related issues, Mr Kondody said that customs duty on scraps and wastes and all raw materials of SSI units should be brought down to 15 per cent from the current level of 25 per cent.
Secondary aluminium manufacturers are finding it difficult to operate when the import duty on aluminium is hiked from 10 to 25 per cent. He urged the Government to withdraw the special additional duty at the rate of 4 per cent as this affected SSI units competitiveness.
He also demanded income-tax exemption for SSI units for the first five years and extendable to 10 years in the case of backward areas. The basic income exemption for SSI should be Rs 5 lakh. The slab rates should be 10 per cent up to Rs 4 lakh and 20 per cent beyond this.
Seeking a low tariff structure as an export incentive to the SSI sector, the Association pointed out that an aggressive policy with regard to foreign trade is the need of the hour and the Government should move faster to a low tariff level at par at least to South East Asian countries.
Indian SSI units and clusters should be allowed to attend more world trade fares, exhibitions at liberal and fast clearance terms.
On regulatory issues, Mr Kondody said the Government should categorise tiny SSI units depending upon the number of employees. Units employing below 50, seasonal industries etc should be exempted from the purview of Employees State Insurance and Provident Fund as in the case of SEZ units.
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