Budget '07: It's time to talk to commerce ministry
August, 03rd 2006
The commerce & industry ministry has kicked off its budget consultations for the 07-08 Union Budget. The ministry has asked all trade and industry associations, business houses and individuals to submit their suggestions by September 15, following which identified issues would be taken up with the finance ministry.
The officials said that associations have been encouraged to raise both new issues as well as old ones. A number of issues raised by the industry year after year have been consistently ignored by the finance ministry. It is important to keep reiterating these issues to keep them alive, an official said.
Correction of the inverted duty structure where import duties on inputs are higher than the duties on finished products existing for certain industries like automobile and vanaspati is one of the primary demands of the industry.
The government has constituted a committee including senior officials from the commerce department, finance ministries and the Planning Commission to look into the problem.
The industry has also been pushing for reduction in corporate tax from 30% to 25% and a clear and consistent policy in dividend distribution tax which would avoid cascading effect.
Demands from the exporting community include total relief from payment of fringe benefit tax and service tax as they claim that it is very difficult to get a refund. The commerce and finance ministries also have to decide on a replacement scheme for the duty entitlement pass book (DEPB) scheme, which has been extended till the end of 06-07.
After meeting with various objections from ministries including finance and law, the commerce ministry had decided to extend the scheme for a year this fiscal. It has now constituted a committee chaired by Planning Commission member Anwarul Hoda to design an alternative scheme.