Industry body FICCI, in its pre-budget suggestion on indirect taxes, has urged the government to withdraw Central Sales Tax (CST), in a phased manner, by 2009.

It recommended lowering of CST by one per cent every six months and sought a clear direction on the entry tax policy which the States will adopt post CST.

Since the intention of the government is to put Goods and Services Tax (GST) in place from April 2010, it is important that the government must bring all items under the ambit of VAT regime, FICCI said in a release.

To have a national VAT in place, a roadmap should be laid down with total incidence of 20 per cent (Cenvat 12 per cent and VAT 8 per cent). This will provide the competitive edge to India in the global matrix as well, the release said.

FICCI also believes that there is an urgent need for a massive cut in commodity taxes, especially on demand elastic items to stimulate demands in the economy.

There is also need to move away from the over-dependence on manufacturing sector as the major revenue earner and instead widen service tax net and restructure custom duties, it said.

Besides, FICCI has also pointed to the need for giving a fiscal booster in terms of tax benefit to sectors like food processing, textile, tyre industry, electronic hardware etc.

On Oil and Gas sector, it said a 10 year tax holiday under section 80 IA be granted to pipelines, storage terminals and other related facilities for transportation and storage of petroleum products.