In­dian de­fence com­pa­nies may get Cus­toms duty re­lief

Move will cre­ate a level play­ing field as for­eign OEMs al­ready en­joy the tax break

The Hindu Business Line - - FRONT PAGE - NAYANIMA BASU

In an ef­fort to soothe the nerves of In­dian de­fence firms, the Cen­tre is mulling Cus­toms duty ex­emp­tion on the im­port of spare parts un­der pro­grammes that were rolled out be­fore April 1, 2017.

The ex­emp­tion will be granted in or­der to bring the In­dian firms on a par with for­eign OEMs who are pro­vided tax ex­emp­tion on the projects they de­velop. The Cus­toms duty is be­ing paid by the In­dian gov­ern­ment on be­half of the for­eign OEMs, sources in the Min­istry of De­fence said.

Ac­cord­ing to cur­rent norms, while for­eign orig­i­nal equip­ment man­u­fac­tur­ers (OEMs) in the coun­try are given tax con­ces­sions on the items they im­port to build ar­ma­ments, In­dian com­pa­nies pay Cus­toms duty.

“If the gov­ern­ment is se­ri­ous about ad­vanc­ing ‘Make in In­dia’ in de­fence man­u­fac­tur­ing, this tax con­ces­sion has to be given to pri­vate In­dian de­fence com­pa­nies. For us, the Cus­toms duty be­comes a part of our work­ing cap­i­tal,” a top ex­ec­u­tive of an In­dian de­fence com­pany told Busi­nessLine.

The ex­ec­u­tive also said that mov­ing for­ward on a project had be­come more dif­fi­cult fol­low­ing the GST roll­out. The is­sue was raised at a meet­ing be­tween De­fence Min­is­ter Nir­mala Sithara­man and In­dian de­fence com­pa­nies last Satur­day.

In­dus­try rep­re­sen­ta­tives asked Sithara­man if Cus­toms duty paid at the time of im­port can be re­im­bursed upon pro­duc­ing a re­ceipt. This will also boost de­fence ex­ports from the In­dian com­pa­nies.

She is be­lieved to have as­sured the de­fence firms that she would take up the mat­ter with the Min­istry of Fi­nance.

How­ever, as per the Bud­get 2017-18, not all projects rolled out af­ter April 1, 2017 will be li­able for Cus­toms duty ex­emp­tion, re­gard­less of whether it is be­ing ex­e­cuted by an In­dian or a for­eign OEM.

Newspapers in English

Newspapers from India

© PressReader. All rights reserved.