Panel discusses tax sops to manufacturing to attract FDI
September, 08th 2011
Amid fears of slowdown, a high-level meeting headed by Finance Minister Pranab Mukherjee today discussed ways to increase tax benefits to the manufacturing sector to attract more overseas investment.
The Committee, which had its third meeting here today, also gave various suggestions for avoidance of taxation on dividend of Indian companies on investment in global markets, besides reduction in time for settlement of tax disputes.
"The members of CDTAC gave various suggestions... (giving) more tax benefits for manufacturing sector for attracting more FDIs, reduction in time for giving its advance ruling in reduced time frame by the Authority for Advance Ruling," a finance ministry statement said.
Growth in the manufacturing sector dipped to 7.2% in the April-June quarter from 10.6% in the corresponding period of 2010-11.
Also, the overall economic growth in the first quarter this fiscal was at the 18-month low of 7.7%, against 8.8% in the corresponding period last fiscal.
The Government is aiming to increasing manufacturing sector's share in GDP to 25% by 2025, from 16% at present, and and create create 100 million jobs.
The meeting was attended by Minister of State for Finance SS Palanimanickam, members of Central Board of Direct Taxes (CBDT) and other senior officials of the Finance Ministry.
The CDTAC also suggested giving more authority to the Dispute Redressal panel too make it more effective and coming out with creative and taxpayer friendly advertisements by the CBDT. "Income Tax applications by the CBDT be made more user friendly and no need for PAN card for non-tax payers among others," it suggested.
The Committee advises the Government on the measues for developing and encouraging mutual understanding and cooperation between taxpayers and the Income Tax Department.
Besides, CDTAC also advises the Government regarding the measures foe removing administrative and procedural difficulties of general nature.
Speaking at the meeting Mukherjee said to rationalise direct tax laws, the Government has introduced the Direct Taxes Code (DTC) Bill, which is under examination of Parliamentary Standing Committee, and and hopes to implement it from April 1, 2012.
Mukherjee said this year the Government has introduced simple and user friendly SAHAJ (form) for individual salary tax payers and SUGAM (form) for small tax payers availing presumptive tax scheme.
Further, the salary tax payers up to an income of Rs 5 lakh have been exempted from filing tax returns for the Assessment Year 2011-12, the Minister added.
He said that the collection of Direct Taxes has almost doubled in the last four years from Financial Year 2006-07 to Financial Year 2010-11.
"This has been possible due to rationalization of tax structure, improvement in tax administration, better tax payers services and commendable efforts put in by the officers and employees of the Income Tax Department," he added.
He said the 13th Finance Commission has projected Direct Tax Revenue Collection at Rs.8.3 lakh crore by the year 2014-15.
To achieve these target , CBDT will have to continuously evolve process, procedures and look for innovative way of taxation especially related to cross border taxation, he added.