The Hindu Business Line : Export promotion body pitches for right fiscal framework

“A foolproof system of identification should be evolved for the imported products and to ensure that it is re-exported after carrying out the required services,” it said.

Our Bureau

New Delhi, Dec. 18 The Electronics and Computer Software Export Promotion Council (ESC) has asked the Government to create the right fiscal environment for promoting India as a preferred service hub for repair and refurbishment of IT and telecom gadgets.

In its pre-Budget memorandum to the Finance Ministry, ESC said that the market for repair and refurbishment services globally was estimated at over $110 billion.

“Spiralling cost of repairing in developed countries like the US and Europe is compelling companies to send goods overseas, where such services are provided at a lower rate,” Mr D.K. Sareen, Executive Director, ESC, said.

Tapping that market would require re-orientation of customs rules and procedures, ESC added.

A product, which has been imported for repair and refurbishment, should be exported. The misuse, such as being sold in the local market, should be addressed.

“A foolproof system of identification should be evolved for the imported products and to ensure that it is re-exported after carrying out the required services,” it said. Pitching for a conducive fiscal policy framework for small and medium enterprises, the Council called for “positive action” to restore the confidence of SMEs which have been reeling under the pressure of rupee appreciation.

“The number of SMEs in the IT export segment is close to 5000. Most of them have export turnover of less than Rs five crore. Compelling them to migrate to SEZs to avail tax sops would have an adverse effect, such as increased cost and operational problems of shifting,” says Mr Sareen.

ESC has urged the Finance Ministry to grant tax sops to IT units irrespective of the location.