The several concessions on taxes will be applicable for a period of five years initially for the MSMEs who contribute more than 40 per cent in India’s overall economy.
The highlights of the proposals to be made are,
· The profit of the export will be taxed at 10-15 per cent instead of the usual corporate tax rate of 45-50 per cent. The Government may otherwise allow 100 per cent export turnover or profit deduction and deduction of expenditure related to development of export market and sales excluding export sales commission. However, the industry has requested a 200 per cent deduction.
· The Credit Linked Capital Subsidy Scheme (CLCSS), providing subsidy or funds to upgrade machinery in small scale industries, may be hiked from Rs 1 crore to Rs 5 crore. Also the subsidy may be increased per head from 15 to 25 per cent of the actual loan amount. It may be extended to infrastructure and common effluent treatment plants (CETPs) as well.
· As per a suggestion made by the industry, all engineering, chemicals and plastic units could be levied 0.1 per cent on the production to ensure sustained financial support.
· The ministry is formulating duty drawback rates for certain export products which presently do not enjoy the relaxation.
· To ensure quick refund and rebates, the Government is going to make processes like Cenvat payment of drawback, refund of excise duties, Value Added Taxes (VAT) etc. electronic.
Besides, the Government is going to address issues like availability and cost of credit including foreign credit, export marketing support, skill development through labour law etc.