Export Oriented Manufacturing Unit Must Be Established In Sp...| MENAFN.COM

Tuesday, 27 September 2022 02:35 GMT

Export Oriented Manufacturing Unit Must Be Established In Special Economic Zone


(MENAFN- Khaleej Times)

Question: My NRI friends and I propose to set up a manufacturing unit which will export goods to the Gulf. What would be the best way to reduce taxes and have a hassle free procedure for setting up the unit?

The best way to set up a manufacturing unit which is export oriented would be to establish it in a Special Economic Zone. A new legislation is being introduced which is called Development of Enterprise and Service Hubs (DESH) Bill. These hubs will have designated areas separately for manufacturing and service activities. In order to promote certain sectors, pre-cleared zones by the Central and State Governments are planned whereby units set up therein will be deemed to have been provided all statutory and regulatory clearances. The revamping of the Special Economic Zones will come with a fiscal package which may put a ceiling on direct corporate taxes at rates which may be as low as 15 per cent in case of greenfield and brownfield ventures. There may also be concessions in respect of basic customs duty and Integrated GST on imported raw materials. Sales in the domestic tariff area will require the exporter to pay basic customs duty and IGST on the finished products. However, in case of exports, the IGST would be totally waived. It is expected that State Governments will also give incentives for units set up in the SEZs.

Children are now being encouraged to study coding as a necessity in the digital age. However, I have been told that there are other options which are being looked at. Is this true?

The current trend is towards low-code/no-code (LC/NC) solutions. LC/NC platforms allow those with little or no knowledge of coding to build software. These platforms have highly visual software and have a modular approach. These are being used by small businesses who wish to cut down costs on hiring software professionals.

According to experts, if a person has enough skills to use software like PowerPoint or Microsoft Excel, he would also be able to use a no-code platform to build business software. The fact that an average person can now build software has made the LC/NC platforms very appealing. Hence, this has democratized technology and enabled employees to build a code to face their own business challenges. Currently, the LC/NC platform of Microsoft has more than 7 million monthly active users which number is growing every day. Advances in artificial intelligence have played a crucial role in making LC/NC platforms more sophisticated.

There is a disturbing trend in India where car insurance premia are going up substantially. Even premium for medical insurance is showing an upward trend. Is this justified?

With the ebbing of the Covid pandemic and removal of all restrictions, the increased mobility has resulted in higher motor accident claims. To a certain extent, inflation is also responsible for the rise in insurance premia. To counter this, some insurance companies are using artificial intelligence to create a software engine that can underwrite almost 90 per cent of the policies it issues without human intervention. New lines of products are also being introduced such as an umbrella policy for all vehicles owned by a person. Some companies have introduced a scheme like 'pay as you drive' and 'pay how you drive'.

The premium charges are based on the quality and quantity of driving, using telematrics. As regards medical insurance, the premium has increased because non-Covid claims have surged in the past few months. These claims pertain to elective as well as non-elective surgeries. Further, new advanced protocols followed in certain hospitals have increased the quantum of claims which is now reflected in higher premium being charged.

H. P. Ranina is a practicing lawyer, specialising in tax and exchange management laws of India.

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