The Hindu Business Line : Investment ratio-based I-T relief sought for small units

Investment per staff
Works out to Rs 3-5 lakh for small-scale units
Rs 5-10 lakh in the case of medium-scale industry
Between Rs 25-40 lakh for SME industries
For large units, it comes to Rs 50-200 lakh

Coimbatore , Dec. 19

Small-scale engineering units are pitching for income-tax relief from the Centre that can be based on the job potential offered by them with least investment.

While the SSI sector offers more jobs with lower investments compared to the medium and large-scale units, they face the fortune of being turned as industrial training institute for workers with salary, only to lose them after two or three years to the large units, the Southern India Engineering Manufacturers Association (SIEMA) here has said.

In a representation to the Union Finance Minister, the association said that while the average investment per employee by the SSI worked out to Rs 3-5 lakh, the same was between Rs 5-10 lakh in the case of medium-scale industry, and between Rs 25-40 lakh in the case of SME industries

However, the average investment per employee by the large-scale units works out to Rs 50-200 lakh.

This calls for the Centre considering some concession for the SSI units on the rate of income-tax, which can be fixed based on investment/employee ratio, the SIEMA said.

With regard to the rising cost of inputs, it said copper and aluminium prices had kept rising in the past one year.

Input cost

In the case of copper alone, the prices between June 2005 and August 2006 went up by over 200 per cent.

Currently, the import duty on copper concentrates used by the domestic smelting companies is kept at 2.5 per cent, and the finished copper rods, bars or wires attract higher duty at 7.5 per cent. The association wanted the Centre to offer either exemption from the Customs duty or bring import duty at `nil' rate for finished copper rods/wires/bars.

Similarly, it also wanted the Government to levy a cess on export of aluminium to discourage the aluminium exporting companies to have higher margins on their products.

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