TEMA pitches for infra status for domestic equipment manufacturers

NEW DELHI: The Telecom Equipment Manufacturers Association (TEMA) of India has asked Finance Ministry of India to grant Infrastructure status to the domestic telecom equipment manufacturing companies complying with PMA provisions will help the industry to take benefits of the incentives given to the infrastructure sector.

“R&D and IPR creation are critical factors for strengthening the manufacturing sector in the country.In order to encourage more R&D in the sector, we propose to introduce 5 % cess on user of telecom services (service providers) to create a corpus for supporting R&D for technology development in telecom sector,” said TEMA in its budget recommendations letter to the Finance Ministry.

On the other hand, “The government had levied duties on non-ITA products in the last Union Budget (FY 2014-15), where some of the telecom products have been brought under the duty regime,” it said.

There are many telecom / ICT products which are being imported into the country under ‘OTHERS’ category at zero duty.

The products falling under this  Category and are outside the scope of original ITA list, may suitably be reviewed and may be brought under the duty regime of about 25%.

“In line with the measures suggested to stimulate the telecom equipment manufacturing sector economics, it is proposed to extend Income Tax Act Section 35 AD benefits to domestic telecom equipment manufacturing companies which are complying with the PMA provisions, to encourage electronics & telecom equipment manufacturing in the country,”  the association said.

“All rules should be for companies manufacturing the products as per PMA Notification & complying with PMA eligibility criteria,” it concluded.