Ease of Doing business

MAIT is committed to working with the Government to realise its goal of India breaking into the top 50 countries on the World Bank’s index on ‘Ease of Doing Business’ ranking from its current position of 100. For this, it is imperative that the government and the industry work in unison to develop policies that are progressive, cohesive and conducive.

While we work on policy advocacy with the decision makers, it is also MAIT’s endeavour to ensure that the on-ground implementation of these guidelines is efficient and effective. Often execution is a challenge and procedural and process changes are required to be made to increase productivity. On the one hand, those implementing the policy need to be trained to understand its objective and not to give unnecessary importance to minor discrepancies. On the other hand, the industry needs to be guided on making the distinction between an issue of governance (merely a grievance) and a policy issue which hampers Ease of Doing Business.

In order to architect the improvement of Ease of Doing Business index, MAIT recommends the following:

  • Consultation with all stakeholders at the formative stage of legislation: Industry should be conferred with before any policy is put in place so as to gain further insights, seek advice and work around possible issues. Emphasis needs to be made on globally accepted best practices being made mandatory. MAIT recommends that policy drafts and proposed changes are made available in the public domain for a reasonable time period before it is made the body of law.
  • Process simplification: India still reels under the pressure of the license raj and many of our issues are systemic. The manufacturing sector relies heavily on the timely, physical movement of goods, and therefore is the worst affected by regulation. On an average, a manufacturing unit needs to comply with nearly 70 laws and regulations, file 100 returns a year, and comply with multiple inspections. Taxation issues are encumbering the sector with a plethora of pending litigations, wasting precious government resources. MAIT is consistently involving the government and all relevant stakeholders in workshops to help establish a single clearance window for the electronics manufacturing sector.
  • Establishment of a convergence cell: As it stands, with regard to import of IT products, different importers adopt different classifications for the same set of products, owing to no specific classification available in the Customs Tariff. Leaving the decision on customs field officers to use their discretion often leads to delays, especially detrimental to an industry where the time span for obsolesce is limited. MAIT is working with the government to set up a convergence cell, wherein the classification of new IT products should be decided within 30 days of representation.
  • Single, all-inclusive investor policy mandating state-centre coordination: There is a massive disconnect between the centre and state with respect to clarity of sector specific policies and integration of investment incentives. MAIT proposes that a Central Investment Facilitation Window is set up to simplify this process and encourage business continuity.
  • Setting up an ESDM buyer-supplier portal – a platform enabling Make in India: MAIT endorses the setting up of an electronics supply chain portal where buyers and sellers can forge alliances and integrate with one another. The solution will deploy intelligent recommendation engines to facilitate the best-suited supply chain alliances and connect the global and local manufacturing ecosystem.

In addition to the initiatives mentioned above, MAIT counsels that a grievance redressal cell is put in place and that there is increased focus from the government on infrastructure development. Government thrust must be in establishing Coastal Economic Zones (CEZs) that help electronics export clusters flourish and in creating the North-Eastern Gateway to China. MAIT will continue to join hands with the industry and the government to focus on tackling the disability cost, which in turn will bring down infrastructure costs and procedural expenditure. It is our endeavour to steer the sector in the direction of eliminating government concessions altogether and having a positive impact on the economy.

S.No. Issues Recommendation
1

"Inordinate delays in getting permission to import refurbished spare parts"

1. “Reduce time taken to provide approvals. Make the process predictable and reduce the number of documentary requirements; make the process online with proper workflows and deadlines. Making process online will help in mapping where the file is and why it is delayed.

2. Clearly articulate SLAs and turnaround time for approvals.

3. Also, due to delays at MeitY for issuing NoC to imports, DGFT closes file for delay beyond 12 months. Reopening of file due to inter-ministerial delays is very painful. Thus, SLAs and timeline definition/adherence are critical”

2.

Allow commercial samples to be carried under ‘hand carry’ route for R&D units. The current regulation does not allow hand carrying goods which are essentially for commerce & Import of prototypes

Allow commercial samples to be carried under ‘hand carry’ route for R&D units. The current regulation does not allow hand carrying goods which are essentially for commerce & Import of prototypes

3. Rejection of applications for import of used IT and Telecom equipment for office use

"1. Clear articulation of import guidelines for used equipment in India's eWaste and Hazardous Waste policies.  (under MoEFCC & MeitY) .

2. Do not discourage rightful imports of equipment used for office purposes. It is a common practice across industries, worldwide to shift equipment across projects/offices in an organization. This is done to optimize utilization of the equipment.

3. Trust the importing organization to comply with nation's e-Waste disposal framework

4. These is suggestion that used equipment to be allowed should include laptops and Servers also"

4. Formation of Convergence Cell for uniform customs classification of products - In today’s world, numerous IT products get introduced everyday into the market which are imported into India. However, there being no specific classification available in the Customs Tariff.

"A Convergence Cell should be formed wherein classification of new IT products should be decided within 30 days of representation.  This will reduce the confusion as well as litigations arising out of classification issues.

While India has a fairly good structure and practice of sharing information on Customs procedures and policies, it is essential that Customs procedures in India align to global practices and procedures.  India should leverage international precedents (especially Rulings on classification) and policies. There is a need to adapt to the ever-changing environment more quickly in view of the evolving technology and product innovations and this is best addressed by leveraging global precedents.

Invariably, we see that new products/technologies are made available in developed countries earlier than rest of the world, which does afford time for countries like India to leverage knowledge on classification and procedures already adopted in such countries.

5. For STPI units, presently assets that are bonded - primarily the ones on which duty benefit is taken, de-bonding them is a massive exercise requiring detailed calculations, physical inspection, duty payment (where these are not fully depreciated) and filing Ex-bond Bill of Entry.

"1. Computers and computer peripherals that are fully depreciated (upon completion of five years), may be allowed to be de-bonded without any physical examination as no duty is due for such goods.In fact by the end of 4th year, these goods are depreciated by 96%, hence If the applicable duty is paid thby e STPI unit, the de-bonding of the said goods may be permitted without physical examination, if the goods are more than 4 years old.

2. Other assets that depreciate over a period of 10 years, may be allowed to be de-bonded without any physical examination if they are more than 7 years old, subject to payment of applicable duty by the STPI unit as these assets depreciate by 76% on completion of 7 years.

3.A timelimit to complete the de-bonding process may be fixed, given that presently it is a very time-consuming process taking two months or more, to complete the activity. A simpler procedure may be prescribed that will enable the STPI unit to file an application for de-bonding the goods, pay the applicable duty and complete the process in ten days’ time"

6. Bonding License Renewal Whenever a bonding license is renewed all the bonds under that license should automatically get extended till renewed date. If a company has multiple premises under one bonding license, a need to have shifting invoices among each of these buildings is unnecessary. This can be done away with.
7. Removing of bonded capital goods for testing/Demo without payment of duty by STPI units. Customs Notification 52/2003 required suitable amendment to facilitate the business needs.
8. Mandatory Testing and Certification requirements for Servers under the TEC’s MTCTE Procedures Industry members have been asked to provide inputs to reduce the scope of the product covered under the scheme and suggest changes in the process to make it more efficient and simpler.  We need information on redundancies and overlapping provisions in the scheme. An excel file with suitable placeholders for required information has been shared with the members and we are awaiting the response of members.
9. WPC/Import License requirement  
10. TEC Issues MAIT has been made the part of all the Committees formed to implement TEC and we have been regularly conveying the information to all members
11. Incentivize Manufacturing and PMP Plan

"We have been regularly suggesting MeitY on BCD increase for non-ITA products through PMP approach.

We have prepared PMP for few products-Ethernet switch and STB and discussing the same with MeitY"

12. Recommendation for providing incentive under MEIS The MEIS was increased from 2% to 4%.  We have requested for inclusion of more products and increase rate from 4% to 7%
13. New Market Surveillance Process - CRO A detailed comparative analysis of the surveillance process worldwide has been shared with MeitY along with the provisions that we are seeking. The new process is likely to be notified soon.
14. Custom Classification - Import of Antenna of Base Station We have got some clarity from CBEC on classification as well as available exemptions wherein Board is considering it as full machine and not parts, however Board’s Instruction on classification of the Antennae designed for use with apparatus for radio telephony and radio telegraphy appears to be disrupting a long-standing assessment practice, also internationally accepted, and thereby leading to needless disputes
15.

"Ambiguity & Determination of Classification of Patch Panel and

Face Plate used in IT Networking over LAN"

Our understanding is that Patch Panels and Face Plates merit classification under 85369090 and request that products under 8536 should be under 18% as these connectors are integral part of the family of products used in IT Hardware Networking and Telecommunication
16. Component Hub for component availability The Component Hub will be a Bonded Cargo warehouse, which will allow large component vendors to import components from their manufacturing facility overseas and store the same in these Components Warehousing Hubs. The domestic manufacturing companies requiring the components can thus easily procure them from these Component Hubs by clearing the same upon payment of duty at the exchange rate prevailing as on date of clearance of goods from the Hub.

 

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