New Delhi, Nov 13: The next Union budget (2007-08) is more than three months away. But the Confederation of Indian Industry — the apex industry chamber — is ready with its charter of demands.

Lobbying the government for reduction in duties and taxes in its pre-budget recommendations, the chamber wants a reduction in the peak rate of customs duty to 10 per cent from 12.5 per cent.

In excise duties, the chamber wants a cut in the cenvat rate to 14 per cent from 16 per cent and in the duty on processed food and agro-based products to 8 per cent from 16 per cent.

The chamber also wants a cut in the excise duty on multi utility vehicles and vehicles running on petrol to 16 per cent from 24 per cent.

CII has said the cut in customs duty be linked to reduction in central sales tax to 2 per cent from 4 per cent from next fiscal along with reforms in the infrastructure sector, such as lowering costs of electricity and time to handle cargo at ports and airports, that would reduce the transaction costs.

The chamber also wants a simultaneous reduction of customs duty rates on intermediaries and raw materials, including that on non-ferrous metals, to 5 per cent from 7.5 per cent.

In direct taxes, the CII has demanded raising the limit under section 80 C by Rs 1 lakh to encourage investments in infrastructure bonds. Current norms limit savings under section 80 C to Rs 1 lakh.

The chamber has suggested alternative payment procedures for FBT.

“If FBT is not abolished, the choice should be given to tax paying firms to pay a per cent additional corporate tax on its total income in lieu of FBT,” R. Seshasayee, president, CII, said.

The chamber also wants the surcharge on income tax to domestic companies, which was raised to 10 per cent, to go.

“It will be more efficient to have one single rate of taxation rather than have a number of cesses and surcharges which only complicate estimation of tax burden,” said CII.

The chamber wants an increase in the depreciation rate from 15 per cent to 25 per cent for plant and machinery. It also wants goodwill to be included within the definition of intangible assets, to be eligible for depreciation allowance.

The chamber also wants the rate on service tax to stay at 12 per cent.

Also, the industry has asked re-introduction of section 10 (23G) in order to make investment in infrastructure viable.

“In case of comprehensive annual maintenance contracts covering labour and replacement of parts for consumer durables such as air conditioners, refrigerator, computer etc necessary provision may be made to charge the tax on a specified percentage value of the contract amount”.

Also, the industry has asked re-introduction of section 10 (23G) in order to make investment in infrastructure viable.

CII added “FBT should be levied only on element of personal benefit to employees. It should not be impose on pure business expenses as is the norm of countries having FBT tax structure”.

The industry has also asked to abolish minimum alternate tax. CII has demanded to bring it down from 10 per cent to 7.5 per cent.