The Federation of Indian Chambers of Commerce and Industry (FICCI) has urged the government to implement a time-bound CST phase out programme by 09 and to lower the CST by 100 basis points every six months.
The apex industry body will take the matter up with the government next week. In its pre-budget suggestions on indirect taxes, FICCI has suggested that that petrol and petroleum products be brought under the valued added tax (VAT) net with maximum rate of 12.5% across all states.
Other recommendations include laying down of national VAT with total incidence of 20% and massive cut on commodity taxes. In its sector-specific recommendations, the chamber has proposed that the entire chain of food processing industry be given tax holiday.
To create a level playing field in the textile industry, it has called for removing the distortionary exemptions from the CENVAT chain to reach a fibre neutral fiscal regime.
Further , it has underlined the need for a progressive duty structure graduating from raw materials to finished goods, while simultaneously moving towards lower peak rates.
Pointing out to the immense pressure on margins the tyre industry is facing, FICCI has suggested reducing excise duty on tyres to 8% and removing customs duty on natural rubber.
To give a fillip to the pharma industry, the chamber has suggested reducing excise duty to 16%. The recommendations also include exempting life saving drugs from custom duty.
For the electronics hardware sector, it has suggested excise duty at 8% for entire electronics industry value chain and abolishing CST on all electronics hardware immediately.