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The small and medium enterprise (SME) exporters of engineering goods have finally resort to the government after failing to combat the lower overseas sales and poor margins. The small engineering export segment to strongly pitch for tax sops and simplification of export documentation processes and regulations.

The Engineering Export Promotion Council of India (EEPC India), a representative body of engineering exporters, has submitted a pre-Budget memorandum to the Ministry of Finance, demanding incentives to help SME units recover their losses and make fresh investments in the coming year.

It has made a strong pitch for increasing the general rate of depreciation on plant and machinery to 25 per cent from 15 per cent in a bid to encourage micro, small and medium enterprise (MSME) units to undertake fresh investments and create demand for capital goods in the country.EEPC India has demanded for tax exemption on incremental exports for three years, with the base year being 2008-09. They have also asked for a weighted deduction of 1.5 times on the expenses incurred on overseas establishments and R&D for three years. It pitched for extension of 100 per cent depreciation on investments for replacement of obsolete technology in conformity with new global environmental standards.Industry associations have also demanded hike in the import duty for capital goods and reduction in the import duty for raw materials to offer a competitive edge to domestic SME engineering exporters against their global counterparts. Simplification of tax procedures has been sought for exporters to ease their financial burden.