CII for no indirect tax hike till GST implementation
December, 14th 2012
Industry body CII demanded that indirect tax rates be kept unchanged till implementation of Goods and Services Tax regime and rationalisation of subsidies in the forthcoming General Budget for 2013-14. On indirect taxes, CII asked for status quo at the current rates for excise, customs duty and service tax, in order to maintain stability in taxation in its pre-budget memorandum. "The rates may be re-aligned at the time of GST implementation...the budget should aim at facilitating convergence to the long-term objective of having a simplified and rational taxation system," it said.
The industry body said the expenditure should be controlled and there should be cut on non-priority expenditure by rationalising subsides by gradually removing it on diesel. To provide a fillip to the fragile export sector, it recommended the extension of interest subvention scheme to all sectors including automotive, pharmaceuticals, and engineering. CII also underlined the need for fast tracking decision making process for approval of projects by putting in place necessary policy measures to clear 50 large projects in consultation with state governments and relevant ministries within a pre-decided time frame.
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It also asked for expediting the setting of the National Investment Board, raising rate of depreciation from 15 per cent to 25 per cent for investment in plant and machinery in a pre-defined period of 3 years. The industry body also suggested raising Rs 50,000 crore (out of the Rs 4 lakh crore) for asset creation through facilitating the settlement of funds locked up in disputes and litigation.
On revenue generation, it suggested raising Rs 50,000 crore through disinvestment, monetising surplus land available with the government, utilising the free cash flows of PSUs (pegged at Rs 41,500 crore) and unlocking the assets locked up in chronically sick PSUs to augment revenue stream. It said the ailing real estate sector also needs a boost through measures such as allowing the sector to raise funds through external commercial borrowings, American Depository Receipts and Global Depository Receipts.