The Gujarat Chamber of Commerce and Industry (GCCI) has submitted a pre-budget memorandum to the Ministry of Finance, suggesting to limit the discretionary powers of the Income Tax authorities, as it is resulting in unnecessary harassment of even those assessees who are willing to pay legitimate taxes.
K D Shah, Chairman, GCCIs Direct Taxes Committee, said: We have demanded that the effective rate of service tax on most of the taxable services, which is 10.30% (10% plus education cess @ 3% thereon), should be reduced to 8%.
Also, the basic exemption limit for small service providers should be increased to Rs 15 lakh from the current limit of Rs 10 lakh, he added.
Meanwhile, GCCI has also demanded the removal of provisions relating to taxing of fringe benefits, claiming these to be legitimate business expenditure. Some of the other demands include extending the due date of filing tax returns to 31st August and in case of audit to 31st October, taxing of short term capital gains at concessional rate of 10 per cent, and removing the Deemed Dividend provision, which provides for taxing of even those loans which are given to shareholders from a closely held company.
Regarding wealth tax, GCCI has argued that the present exemption limit of Rs 15 lakh was fixed in 1993.
Shah added: This has not changed in these many years, though the value of immovable as well as movable property has changed substantially. We demand it to be increased to Rs 30 lakh. For Tax Deduction at Source (TDS), GCCI has asked for liberalising Section 195 of Income Tax Law and reducing the rate to 10 per cent.
In order to promote clean energy generation in the country, GCCI has recommended that the government must exempt the industries in renewable energy from MAT (Minimum Alternative Tax) for 10 years after commencement of manufacturing operations.
Other initiatives should be income tax exemption in case of sale of carbon credits and exemption from service tax in case of taxable services provided to renewable energy industry, added GCCI officials.