Panasonic India's Manish Sharma on expectations from Budget

As expectations from the Union Budget proposal 2016 mount, the below moves by government will create a healthy business environment with efficient administrative machinery, creating opportunities for the small and big traders and sustain the trust of consumers and investors in the sector and help strengthen India's hold on world's industrial map.Make in India / import substitution

• A specific policy to encourage LCD panel fabrication in India. India already has a semiconductor policy which could be extended to LCD panel fabrication, as they are treated at par internationally
• Specialised focus on addressing the Inverted duty structure by providing the Special Additional Duty (SAD) exemption to manufacturers. This is their bid to encourage domestic manufacturers who have very slim margins and to promote import substitution
• Exemption of key input materials such as Polypropylene and Acrylonitrile Butadiene Styrene (ABS) from the Basics Custom Duty (BCD), subject to actual user condition, to put domestic manufacturers of washing machines, refrigerators and air conditioners on par with the importers who import at 0 per cent BCD

Sustainable development

• Higher excise and customs duty exemptions on the procurement of material/equipment for producing Energy Efficient Rating (EER) products
• Measures to encourage the use of substitutes for ozone depleting substances. This will be in tune to the undertaking India has taken for implementing the Montreal Protocol

Ease of doing business in India

• There is a need to address inverted duty structure. Budget 2015 extended SAD exemption on import of certain products for use in manufacture of IT hardware. However, appliance and consumer electronics (ACE) manufacturers still face the same issue as the value addition in this sector, for several products, is quite low and results in an inverted duty structure. Also, the GST rate should be reasonable and in line with rates prevalent in other Asian countries (varying from 6 per cent in Malaysia to 17 per cent in China)
• Overhauling of Special Valuation Branch (SVB) procedure to simplify imports, viz. specifying a definitive time frame for issuance of the SVB order, shorter time frames for issuance of renewal orders and relaxation/removal of SVB orders on goods that attract a nil rate of basics customs duty
• Expedited customs clearances for goods that are time critical and contain Research and development shipments
• Removal of mandatory pre-deposits of tax/duty and lower limits for startups and SMEs
• Relaxation of credit restrictions and CENVAT limits with respect to several input services which have been hitherto not been clearly put into scope

 

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