Worried over the impact of global financial turmoil on the economy, India Inc today asked the Finance Ministry to retain tax rates at existing levels, but increase exemption limits to promote growth.
In their customary pre-Budget meeting with Finance Minister Pranab Mukherjee, industry leaders also demanded that healthcare services should be kept outside the ambit of service tax and minimum alternate tax (MAT) be rationalised.
Besides, they also made a case for giving infrastructure status to aviation, telecom, healthcare and education sectors, quick implementation of Goods and Services Tax (GST) and continuation of interest rate subvention scheme for exporters till March 31, 2013.
The meeting was attended by ITC Ltd Chairman Y C Deveshwar and HUL MD and CEO Nitin Paranjpe and representatives of industry chambers.
"We asked for giving infrastructure status to healthcare and education sector. We also sought speeding up of PSU disinvestment, widening tax net and implementing GST as fast as possible," CII President B Muthuraman told reporters after the meeting.
Pitching for enhancement in the income tax limit, Ficci President R V Kanoria demanded that 30 per cent tax slab should apply to individuals with an annual income of more than Rs 10 lakh, as against Rs 8 lakh now.
"We have made a case for retaining the tax rates at the present level. There should be no increase in corporate tax, service tax and excise," Kanoria said.
Echoing similar views, Assocham President-elect Rajkumar Dhoot said the industry has urged the government to advice Reserve Bank to reduce interest rates by one percentage point. FIEO President M Rafeeq Ahmed said, "Interest rate for the MSME sector should be capped at 7 per cent and for others at 9 per cent and subvention should be provided to all sectors of exports at least till March, 2013".
Kanoria said the existing rate of MAT, a levy which was introduced to bring zero tax paying companies into the net, should not exceed 50 per cent of the basic corporate tax rate.
At present, companies pay MAT at 18.5 per cent, which translates to 20 per cent after including surcharge and education cess.
"Infrastructure companies, units in Special Economic Zone (SEZ), SEZ developers and investment companies should be exempted from MAT," Kanoria said.