The Gujarat Chamber of Commerce and Industry (GCCI), an apex industry body, has demanded a complete abolition of Fringe Benefit Tax (FBT) and Dividend Distribution Tax (DDT) in the forthcoming Union Budget. The demand for the abolition of FBT and DDT in detailed pre-budget memorandum was sent to the union finance minister P Chidambaram.
Shri Pankaj Patel, President, GCCI, has also suggested that as an alternative to FBT, there should be a threshold limit of turnover beyond which the FBT provisions should be made applicable. He demanded that genuine business expenses incurred on non-employees should be excluded from the purview of FBT. Patel has tried to point out in the pre-budget memorandum that small business groups in semi-urban and rural areas are finding it difficult to comply with FBT provisions.
On DDT, he said, The Gujarat trade and industry body wants that central government should do away with this tax in the next budget. However, if it is not possible for the government, the rate of the tax ought to be reduced from 1.25% to 10%. GCCI has also sought the reduction in Minimum Alternate Tax (MAT) from the present 10% to earlier rate of 7.5%.
On the issue of surcharge on TDS provisions, it has demanded that TDS should be deducted at the prescribed rate without applying surcharge and education cess.
Apart from a number of suggestions and recommendations on direct and indirect taxes, GCCIs other demands with respect to indirect taxation include increase in central excise exemption limit for small scale industries from Rs 1 crore to Rs 3 crore.