Indian Electrical & Electronics Manufacturers' Association (IEEMA) on Wednesday asked the government to revise rates of tax refund for electrical equipment industry under the Remission of Duties and Taxes on Exported Products (RoDTEP) scheme as these are "abysmally low".
The rates for different sectors include 0.5 per cent, 2.5 per cent and 4 per cent. Though the electrical industry was awaiting clarity on the rates for a long time, the announcement by the government has left the sector largely disappointed at the turn of events, IEEMA said in a statement.
To boost exports, the government on Tuesday announced rates of tax refunds under the export promotion scheme RoDTEP for 8,555 products, such as marine goods, yarn, dairy items.
The government has set aside Rs 12,454 crore for refunds under the RoDTEP scheme for the current fiscal.
Stating that the announcement went against expectations, IEEMA Vice President Vijay Karia said,"The RoDTEP scheme for the cable industry is abysmally low rate of 0.8 per cent per meter for electric cables to 0.9 per cent per meter for fibre optic cables." This does not cover the input duties and taxes on manufacturing and inland transportation costs, which as a matter of principle should not be exported in order to remain competitive in exports, he added.
"We hope this is an interim step from the government and proper rates will be affixed shortly after taking inputs from industry," Karia said.
Expressing similar sentiments, IEEMA President Anil Saboo said the scheme disappointed many exporters as the rates are much lower than MEIS (Merchandise Export Incentive Schemes) rates with lesser budget allocation.
"The main aim of the RoDTEP scheme was to give a boost to Indian exports by offering a level playing field to the domestic industry abroad. But looking at the present notification we believe that the ambitious target of achieving USD 1 trillion in exports by 2025 will be achieved only if the government reviews the rates especially for the electrical equipment industry which have excellent potential to grow by three times," he said.
IEEMA is the apex association of manufacturers of electrical, industrial electronics and allied equipment in India and claims that its members contribute to more than 90 per cent of the power equipment installed in the country.
