Union minister of state for finance, Jayant Sinha, today said the Centre was looking into the plea of industry to raise the excise duty exemption limit for micro, small and medium enterprises (MSME) from present Rs 1.5 crore. He asked the industry to "wait till the budget"; sending feelers to the industry that its demand for raising the threshold limit may be met soon.
"We have got many representations from the industry on raising excise duty exemption limit for MSME and we are looking into it. I would request you to wait till the budget," said Sinha while interacting with captains of industry from Northeastern region through video conferencing from New Delhi. Presently, the excise and service tax exemption limits to the MSMEs are Rs 1.5 crore and Rs 10 lakh, respectively. The industry is demanding that the same be raised to Rs 3-5 crore and Rs 25-30 lakh respectively.
However, the junior finance minister also gave hints that the ensuing Union budget might not have too much of fiscal concessions for the industry. He said since the "target" of the government was to bring down the fiscal deficit, hence "there is no reason or space to have tax concessions."
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"Our target is to bring down the fiscal deficit. We have to be very prudent and check doling our fiscal incentives and concessions," said Sinha.
He added: "The problem in India is not paying too much but not paying enough tax. Our tax-GDP ratio is barely 15 per cent, whereas the same in developed countries is around 30 to 35 per cent.
