CEAI urges govt to allow registration of Indian Consulting Engineers Companies under MSME category

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Consulting Engineers” apex body CEAI on Tuesday urged the government to allow registration of Indian Consulting Engineers Companies under Micro Small and Medium Enterprises category to take advantage of slew of initiatives announced for the sector.
CEAI in a statement said that it has urged the Micro Small and Medium Enterprises (MSME) Minister Nitin Gadkari for reclassification of MSMEs to allow registration of Indian Consulting Engineers Companies (INCEs).

This will help INCEs take advantage of slew of initiatives announced for the MSME sector and to compete with multi-National Consulting Companies, it added.

CEAI represents the Indian Engineering Consultancy professional at the International Federation of Consulting Engineers (FIDIC). Its membership comprises practicing consultants, private and public sector firms. It has 300 members.

There are a number of good Indian Consulting Companies with annual turnover in the range of Rs 250 crore to Rs 400 crore. But, these companies are unable to take advantage of the slew of initiatives announced for the MSME sector, CEAI President Amitabha Ghoshal said.

Ghosal further noted that these companies are struggling despite large turnover, on account of COVID-19 slowdown, delays in payments by clients, wrong practice of GST deduction/ non-payment adopted by clients and delays in refund of Income Tax.

Chairman CEAI Infrastructure Committee, KK Kapila said INCE companies are competing both in India and abroad against MNCE Companies, all of whom have deep pockets, low cost funding, foreign Government backing and international resources.

All tenders with an estimated fee of Rs 200 crore must be restricted for ”Indian firms” only, said Kapila.

“Non-Indian Firms should not be allowed to register under the MSME category and draw the benefits actually meant for the Indian entities, which is happening in the current scenario because of the lacunae in registration of the Foreign Firms in India, being treated as Indian firms though they are wholly owned subsidiaries of foreign companies,” Kapila noted.

The apex body said there is current practice in most government tenders to have pre-requisites that are too stringent for INCE companies to meet and this results in award of large consulting assignments to MNCE companies.

“Also the share of the Lead Firm or INCE Company should be a minimum of 40 per cent in such tenders. This will ensure both monetary and professional growth and development of the INCE Companies to be global players,” Kapila added.

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