TANSTIA suggests payment for MSME vendors without delay
Updated: Feb 26, 2015 01:32:32pm
Chennai, Feb 26 (KNN) In its wish list for the Union Budget 2015-16, the Tamil Nadu Small and Tiny Industries Association (TANSTIA) said that without addressing the delayed payment for SMEs, no other measure will help in reducing non-performing assets (NPAs).
The organisation requested the Centre to consider maximum 180 days as a norm to declare NPA instead of 90 days presently kept by financial institutions for the non-payment of dues. This will support manufacturing firms with longer production cycle.
Without additional credit term, it may cause a liquidity crisis for such enterprises. There should be reduction of interest for SMEs and facilitation council should be given judicial power to prosecute the defaulters, it said.
Considering rehabilitation of sick units, TANSTIA suggested for an appropriate MSMEs sick units rehabilitation scheme.
“Since considerable assets get struck up when the investment is not used, there is an urgency to work out a new exercise on sick unit rehabilitation to protect employment and preserve the entrepreneur morale,” it said.
Further, in the Board of Industrial and Financial Reconstruction (BIFR) cases, many suppliers of MSE segment get struck up for payment which impairs the efficiency of healthy units. The BIFR Act to be amended suitably to ensure priority payment to the MSME suppliers, it suggested.
Citing that Public Procurement Policy has not been implemented in completely TANSTIA said thousands of crores are spent for import of defence equipment and most of the money paid to foreign countries.
It said defence industries in India are capable of manufacturing and supplying any equipment required for Indian forces to international standards.
NSIC can identify some products from PSUs and can be procured from the MSMEs, it said.
The organisation also laid some recommendations on anomaly in levels of Excise and Customs Duty structure affecting the growth of the sector.
The exemption limit should be increased to Rs 3.00 Crores, hard copies should be insisted by the inspectors, unnecessary audit should be avoided and self-declaration is sufficient, it said.
It also emphasised that all the yarn manufacturers are not having Central Excise Registration which resulted in loss of CENVAT on raw materials for knitwear.
Central Excise registration should be made optional for knitwear and it should be made mandatory for yarn also, it said.
Regarding tax related issues, TANSTIA suggested that industrial association should be exempted from income tax and service tax.
“Industrial Associations, Clusters, Trust, NGOs and similar bodies which function for the benefit of their members and to help them upgrade must not be included in the same bracket as Entertainment Associations and must be exempted from Income Tax and Service Tax,” it said.
TANSTIA also requested to exempt counter veiling duty (CVD) on Import of Steel to Manufacturing Blades for Agricultural and also Impose Anti-Dumping Duty on imported blades from China and Europe to save this industry. (KNN/ST)
The organisation requested the Centre to consider maximum 180 days as a norm to declare NPA instead of 90 days presently kept by financial institutions for the non-payment of dues. This will support manufacturing firms with longer production cycle.
Without additional credit term, it may cause a liquidity crisis for such enterprises. There should be reduction of interest for SMEs and facilitation council should be given judicial power to prosecute the defaulters, it said.
Considering rehabilitation of sick units, TANSTIA suggested for an appropriate MSMEs sick units rehabilitation scheme.
“Since considerable assets get struck up when the investment is not used, there is an urgency to work out a new exercise on sick unit rehabilitation to protect employment and preserve the entrepreneur morale,” it said.
Further, in the Board of Industrial and Financial Reconstruction (BIFR) cases, many suppliers of MSE segment get struck up for payment which impairs the efficiency of healthy units. The BIFR Act to be amended suitably to ensure priority payment to the MSME suppliers, it suggested.
Citing that Public Procurement Policy has not been implemented in completely TANSTIA said thousands of crores are spent for import of defence equipment and most of the money paid to foreign countries.
It said defence industries in India are capable of manufacturing and supplying any equipment required for Indian forces to international standards.
NSIC can identify some products from PSUs and can be procured from the MSMEs, it said.
The organisation also laid some recommendations on anomaly in levels of Excise and Customs Duty structure affecting the growth of the sector.
The exemption limit should be increased to Rs 3.00 Crores, hard copies should be insisted by the inspectors, unnecessary audit should be avoided and self-declaration is sufficient, it said.
It also emphasised that all the yarn manufacturers are not having Central Excise Registration which resulted in loss of CENVAT on raw materials for knitwear.
Central Excise registration should be made optional for knitwear and it should be made mandatory for yarn also, it said.
Regarding tax related issues, TANSTIA suggested that industrial association should be exempted from income tax and service tax.
“Industrial Associations, Clusters, Trust, NGOs and similar bodies which function for the benefit of their members and to help them upgrade must not be included in the same bracket as Entertainment Associations and must be exempted from Income Tax and Service Tax,” it said.
TANSTIA also requested to exempt counter veiling duty (CVD) on Import of Steel to Manufacturing Blades for Agricultural and also Impose Anti-Dumping Duty on imported blades from China and Europe to save this industry. (KNN/ST)
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