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The micro and small enterprises (SME) in Prime Minister Narendra Modi’s constituency of Varanasi have sought tax and other benefits in the Union Budget 2014.
Varanasi Laghu Udyog Sangh has written to Union Finance Minister Arun Jaitley seeking relief in service tax, central excise and income tax, besides rationalising provisions pertaining to the Companies Act, audit, Employees Provident Fund (EPF) etc.
The Sangh has members based in Varanasi, Bhadohi, Mirzapur, Azamgarh and Ghazipur districts.
“Majority of our members are engaged in the electrical, electronics, packaging and metal-based industries,” Sangh president K K Gupta told Business Standard .
He said the Micro, Small and Medium Enterprises (MSME) contributed a major share in the revenues of the central and state governments, however, the sector had been facing tough times over the last decade due to imposition of several new taxes.
Gupta maintained industries, especially based in eastern Uttar Pradesh were buckled under the “heavy load” of taxation formalities viz. preparation of monthly/quarterly challans and returns.
The micro and small industries are a one-man show and the promoter has to manage administrative and financial control, raw material, manufacturing, inspection, marketing and R&D. Therefore, the tax formalities should be at a minimum, he suggested.
Gupta also underlined the threat to domestic industries from Chinese products.
“The Chinese products are much cheaper and Indian companies are struggling to compete with them. Most of the SMEs have closed down or have become sick. One of the main reasons is the cumbersome and time-consuming tax formalities,” he added.
The Sangh has demanded depreciation rate should be increased from 15 per cent to 25 per cent, as lower depreciation was discouraging investment in plant and machinery, thereby affecting scale of production and quality control systems.
Greater investment in plant and machinery would promote SMEs and enable them to compete globally, he said.
