Budget-08: Cut in taxes, duties top India Inc wish list
November, 26th 2007
Reduction in corporate and income tax rates, lowering of excise duty and exemption from fringe benefit tax topped the wish list of industry bodies and corporates for Budget 2008-09.
The government on Thursday kickstarted the pre-Budget consultations with revenue secretary PV Bhide meeting corporate heads and industry chamber, including Ficci.
Industry representatives asked Mr Bhide to reduce corporate tax to 25%, which currently works out to 33.9% including the surcharge and education cess.
Industry leaders such as Indo Rama Synthetics chief OP Lohia, Moser Baer Indias Deepak Puri, Fortis Healthcares Shivinder Mohan Singh and Bombay Dyeings Ness Wadia asked for scrapping the dividend distribution tax and minimum alternative tax and introduction of sops for sunrise sectors besides reviving the tax holiday for multiplexes and telecom services.
They also urged the government to extend the status of infrastructure to cold chain establishments and healthcare industry. Fortis Healthcare CEO Shivinder M Singh said that this was imperative to attract more investments into the healthcare sector.
Ficci secretary general Amit Mitra said the industry body called for a reduction in the excise duty rate from 16% to 12% in 2008-09 and later to 12%. The industry also demanded service tax credit or exemption to exploration and production activities.
Ness Wadia said that the government should address the high surcharge on aviation turbine fuel and incentivise the construction of small apartments for middle income groups.
The delegation made a plea to reduce the excise duty on synthetic fibres, polypropylene fibre and filament yarn along with their raw materials and intermediates to 4%. The inverted duty structure in the case of some petrochemical products, where the excise duty on finished products is less than that on raw materials, should be addressed, they said.
Service tax on oil exploration and licensing activities should be removed as it discourages foreign oil giants who have shown interest in participating in the bidding. Industrialists also requested for a technology upgrade fund for the paper industry.
Merchant Chamber of Commerce from Kolkata demanded simplification of the tax regime, fringe benefit tax exemption to travel expenses and a white paper on the proposed goods and service tax.
While the last Budget of the ruling coalition is expected to be a populist one, industrialists said after their meeting that they received favourable feedback on many of the proposals.