IT manufacturers’ industry body Manufacturers’ Association for Information Technology (MAIT) has shared budget recommendations to boost IT manufacturing in India.
MAIT’s Pre-budget Recommendations
Government can reduce time taken for customs clearances by extending the green channel facility for free movement of goods pertaining to R&D shipments; encouraging hand carriage of goods with provision for monthly customs duty payment facility; relaxation of mandatory first check processes at the ports pertaining to free of charge / exempted shipments; and avoiding Special Valuation Branch (SVB) inspections for goods that are already cleared under duty exemption schemes.
Government should avoid MoEF (Ministry of Environment and Forest) clearance for import of refurbished goods for testing or R&D in order to avoid delays in movement of goods. Second hand / refurbished goods imported into India for business purposes do not require clearance from the MoEF. Such clearance must be required only for goods that qualify as ‘waste’ or ‘scrap’. Second hand / refurbished goods when imported by SEZ/STPI units for the purpose of testing or R&D shall not require prior clearances from MoEF.
Convergence Cell can improve clarity in product classification. Formation of Convergence Cell can decide on classification of new IT products within 30 days of representation to reduce instances of confusion and cases of litigation.
There should be incentives to encourage domestic manufacturing. MAIT has recommended more clarity with regard to levy of basic customs duty (BCD) and exemption of goods manufactured by SEZ units for the domestic market.
Speedy disposal of Special Valuation Branch (SVB) cases will avoid unnecessary delays and uncertainties. MAIT has also suggested amendments for rationalization of tax structures to avoid double taxation (VAT and Service Tax) and relaxation of CENVAT restrictions to improve credit access for certain services.