Reforms in the taxation structure including GST, restoring export incentives, simple and consistent policies and compliances are some of the key issues to be addressed in the budget. Tax rate of 25 per cent is extended to companies with an annual turnover of up to Rs 400 crore. Time has come that this limit is raised to Rs 1000 crore so more small units can avail the benefit.
Ambiguity over the export incentives under the new Remission of Duties or Taxes on Export Products (RoDTEP) scheme replacing the Merchandise Export from India Scheme (MEIS) has put the pharma MSMEs in a bother. The clarity in the budget will be very helpful. The pharma industry has been enjoying 2 to 5 per cent of the export incentive value by way of MEIS scheme.
Tax deduction should be allowed not only on R&D but also on product development as product development is a key in exports, and should be encouraged. To encourage R&D, the Government must carry forward a present 150 per cent deduction on in-house R&D.”