Local chapter of Indian Chamber of Commerce and Industry has made a strong plea for removal or rationalisation of the Minimum Alternate Tax (MAT).
In a resolution adopted at its 72nd annual general meeting here last night, the Chamber said the difference between profits shown in the year end financial statements and IT returns submitted was because of the different treatment of expenses or income in the balance sheet and various deductions allowed under the Income Tax act.
Saying that the differences were not because of any fault or mis-statement of enterprises, it said penalising an enterprise for getting a better image in the corporate world was injustice and hence the provisions of MAT should be removed.
If the MAT was not removed, it could be rationalised, as while calculating current year book profits, the net profits had to be reduced by the amount of loss brought forward or unabsorbed loss of depreciation, whichever was less. This should be changed in such a way that both the loss and depreciation brought forward should be reduced, it said.
At present MAT provision was not applicable to sick companies registered under BIFR. This should be changed, as if MAT was not applicable to all sick companies, because SSI's cannot be registered with BIFR, the chamber observed.