New Delhi: Industry association CII has proposed a tiered roadmap for competitive import duties over a period of three years, with the lowest or zero values for raw materials between zero and 2.5 percent, for finished goods between 5 and 7.5 percent and for finished goods between 2.5 and 5 percent is cents for intermediates as part of his budget recommendations to the government.
The Association of Indian Industries (CII) has proposed the roadmap to promote domestic manufacturing in line with global trade trends that would increase India's export competitiveness due to a shift in global value chains over the next three to five years.
“This will help Indian industry to integrate into the global value chain while at the same time becoming competitive with its goods and services on world markets,” said the industry association.
The CII advocated the need to boost employment at higher levels and suggested raising the pay cap to 50,000 rupees per month to encourage employment in more skilled occupations.
§ 80JJAA provides for a deduction of 30 percent on the remuneration paid to new employees, which can be claimed for three years. This is available up to Rs 25,000 per month.
In addition, recent years have shown that in order to strengthen the financial strength of banks and stabilize the financial sector, RBI has instructed banks to increase their provisions for non-performing assets (NPA).
The CII has proposed that the bad debt provision limit for Indian banks in Section 36 (1) (viia) (a) be increased from the existing 8.5 percent to 15 percent.
Banks operating in India facilitate foreign investment through Foreign Portfolio Investment (FPIs) by acting as custodians (cash and securities) for the FPIs investing in India.
The industry association said specific clarifications should be made so that banking and brokerage service providers are not viewed as representative appraisers of their clients. In addition, the RBI has reduced the limit for an account to be recognized as an NPA from 6 months to 90 days.
“Rule 6EA should be changed so that in the case of banks, interest on NPAs that are more than 90 days past due should be excluded from total income and taxed only on a received basis,” the CII said.
“All of the above initiatives would go a long way in restoring economic growth and taking a step towards a tax-friendly regime,” he added.
According to the industry association, its recommendations take into account the stressed household situation resulting from a sharp decline in revenue collections due to the economic slowdown caused by COVID.
The Union budget for 2021-22 is expected to be presented to Parliament on February 1st.