Moneycontrol
Feb 08, 2013 04:49 PM IST | Source: Moneycontrol.com

Budget 2013-14: Forging body seeks low costs, ban on ore export in Budget

The Indian forging industry has kept abreast with the domestic manufacturing sector‘s demand, yet exporting significant quantities despite surging input costs of fuels, power and labour charges during the past months of the financial year.

Budget 2013-14: Forging body seeks low costs, ban on ore export in Budget

Babu Rao
AIFI


The Indian forging industry has kept abreast with the domestic manufacturing sector’s demand, yet exporting significant quantities despite surging input costs of fuels, power and labour charges during the past months of the financial year.


The industry is a supplier of critical components for automotive OEM’s in India as well as in countries such as USA, Europe, China, Japan and other countries. We request the government to facilitate our growth by taking measures to ensure reasonable pricing of inputs, mentioned above, to give us the competitive edge, which is imperative to compete effectively in global markets. In this connection we would like to highlight following specific issues for which we seek support from the government:



Sr.No.

Issue

Justification

1.

Ban export of higher grade iron ore, if not all iron ore grades.

1] India should export ‘value added products’ – in this case steel and then forged steel parts - rather than Country’s iron ore.

2] Our Steel prices need to match with International prices, especially China’s, for which Steel companies should not have the excuse of adequate right quality iron ore availability at reasonable rate within the country. Besides, Forging Industry looses on export orders due to higher Indian Steel prices compared to others.

2.

Enforce transparency to keep the continuously increasing & spiraling steel prices in check

Will reduce inflation, and ensure a continuous robust demand, which is impossible with high steel prices. Besides, will stop the Steel mills from acting in collusion in artificially keeping the steel prices high, and in turn only benefiting their already high profit margins.

3.

Creation of Technology Up Gradation Fund.

Access be given by way of reimbursing up to 5% interest charged by the financial institutions

Or

Coverage of exchange rate fluctuation of up to 5% in respect of foreign currency loans

There is huge historical backlog of technology up gradation. In order to upgrade its

technology level it is essential for the engineering industry to have access to timely & adequate capital at internationally comparable rates of interest

4.

Bring in uniform GST resolving issues hindering its implementation.

Single point taxation will reduce paper work.

5.

Reduce CST to 1% from 2%

In view of delay in enforcement of GST

6.

Roll back excise duty and service tax rates to a level of 8 percent which were increased in the last two Union Budgets from 8 percent to 12 percent

The industrial growth has significantly fallen. Due to low capital investment and high inflation, the demand for indigenous goods and services is affected adversely.

7.

Restore tax rebate available earlier under Section 80HHC on export turnover,

if required,

with a rider that the funds saved this way will have to be re-invested over the period of next three to five years for augmenting production capacities by bringing in additional and latest plant and machineries

Will help improve product quality & enable Indian engineering industry to cater to the expanding export markets

8.

Bring down MAT rate to 10 % from the present 18.5%.

 

MAT rate has been increased from 7.5 % in 2007 to 18.5 % for 2011-12. This rate of 18.5     % is high as it adversely affects the MAT paying companies, particularly the manufacturing companies

9.

Remove Surcharge as well as Education Cess on

Corporate assessees

 

The surcharges, including the education cess were levied only as a temporary measure.

Bring corporate tax, at least, to the levels of south East Asian countries such as China 25%, Malaysia 25%, Singapore 18%, Hong Kong 17.5% creating a level playing ground for Indian Industry while competing with these countries.

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