Industry chamber CII has asked the finance ministry to do away with the fringe benefit tax on infrastructure development companies, besides providing them with various other fiscal sops in the Budget 2007-08 to increase investment in infrastructure.
The upcoming Budget should incorporate fiscal measures to increase investment in infrastructure from the current level of 5% of GDP to 6% of GDP next fiscal, CII said in a statement here.
In the next five years, investment in infrastructure must go up to at least 10% of GDP, the chamber said.Infrastructure development companies should be excluded from the purview of FBT, the chamber said. Alternatively, it suggested that the percentage with respect to all the specified expenses, on whose basis FBT is levied, be reduced to 5% from up to 50% for infrastructure companies on the lines of software, pharma and construction companies.
CII also suggested exempting infrastructure companies from the Minimum Alternate Tax, saying it would improve the general status of infrastructure in the country.
MAT is the tax imposed on profit making companies, which are otherwise exempted from various taxes due to sectoral sops. The chamber said it appreciates the Governments intention to remove exemptions, but infrastructure should be provided with fiscal sops for the much-needed growth of the sector.
The chamber also prescribed bringing gas transportation and distribution projects under infrastructure to provide it fiscal sops.