India Inc asked to gear up for almost exemption-free tax code
March, 08th 2007
Every exemption has a father, grandfather, guardian and a foster parent: Chidambaram
FM speak Industry and services would stand to gain from boost in rural incomes and purchasing power of rural India. Customs duties were cut in the Budget to make industry more competitive.
The Union Finance Minister, Mr P. Chidambaram, on Wednesday asked Indian Inc to gear up for a largely exemption free tax code in the coming days.
"If we cut away the over burden and go to the bottom of your arguments, you are asking why are we removing or curtailing this exemption or that exemption. My short answer is all these exemptions have to make way for a by and large exemption-free tax code," Mr Chidambaram said here today.
Minimum alternate tax
Addressing a post-budget meeting of the Confederation of Indian Industry (CII), Mr Chidambaram pointed out that every word written in the Budget (tax provision changes) revolved around some exemption or the other.
"Every exemption has a father, grandfather, guardian and a foster parent," he said.
Mr Chidambaram, however, made it clear that research and development (R&D), senior citizens, vulnerable sections and knowledge frontier areas deserved exemptions and they would not be disturbed.
"Every other exemption would be looked at very carefully and to the extent possible every exemption will indeed be trimmed," he said. Citing the criticism from certain quarters on expansion of minimum alternate tax to Section 10A and 10B, he highlighted that the bottom of the argument is that the exemptions should be continued.
The Finance Minister also told CII members that customs duties were cut in the Budget to make industry more competitive. "I have no doubt in my mind that the Indian growth story would continue," he said.
On inflation, Mr Chidambaram said that there is no reason to believe that inflation cannot be moderated or would not be moderated. On agricultural focus of the budget, Mr Chidambaram pointed out that industry and services would stand to gain from boost in rural incomes and purchasing power of rural India.
Meanwhile, the CII Vice-President, Mr Sunil Mittal, urged the Finance Minister to look at providing capital subsidy for industrial ventures in rural area for agri-projects.