Indian Electrical and Electronics Manufacturers’ Association ( IEEMA), the apex representative body of manufacturers of electrical equipment, professional electronics and allied equipment, has appealed to the government to extend service tax exemption to power generation, transmission and distribution related services. Ieema has called for the refund of excise duty paid by the domestic manufactures as a deemed export benefits.

IEEMA has suggested that higher and accelerated depreciation should be allowed for construction equipment at construction sites at 30% from the present level of 15% so that the equipment can be written off in 10 years. This would enable companies to bring in better technology in manufacturing sector where newer technologies can reduce project cycle time.

In its pre-budget memorandum to the finance ministry, Ieema expects the government to focus on encouraging manufacturing and creation of level playing field for the industry to maintain its competitiveness.

IEEMA suggested that, “Being an important infrastructure sector, power generation, transmission & distribution related services should also be exempted from payment of service tax. With the mission of providing power to all on demand at affordable cost; exempting all power projects from the levy of service tax would definitely be a step in the right direction and reduce the project cost.

The generation equipment sector is 26% of the total industry and the transmission and distribution (T&D) equipment sector comprises of 74% of the industry. Growth rate of electrical equipment sector decelerated to 6.9% in 2011-12 as compared to 11.3% and 13.7% in 2009-10 and 2010-11 respectively. For the first time in 10 years, the electrical equipment industry has seen a negative growth of 3.9% in the first five months of the current fiscal (2012-13). Therefore, IEEMA has made a case for refund of excise duty paid by the domestic manufacturers as a deemed export benefits.

On interest on excise duty for differential price, Ieema has called for amendment to the sub rule 4 of Rule 7 of Central Excise Rules, 2002, replacing "the month for which the duty is determined’ by ‘the month in which the duty is determined’, to avoid applicability of interest.

Ieema has suggested that entire tax be paid either by the provider or the recipient of the service, Further, Ieema has urged the government.