New Delhi, Jan 6: Delegations from the three leading industry chambers — Ficci, CII and Assocham — today held pow-wow sessions with senior finance ministry officials as part of a pre-budget brainstorming exercise where they lobbied hard for a reduction in the corporate tax rate by 5 percentage points to 30 per cent, abolition of the minimum alternate tax (MAT) and tax dividend distribution in the hands of the companies.
The deliberations were held despite finance minister Jaswant Singh’s directive to dispense with pre-budget meetings and rely instead on written comments from various interest groups. The finance minister seeks to do away with a practice that was initiated by Manmohan Singh.
Singh had said, “Written comments and views will be far more relevant and useful than holding meetings which do not provide adequate time and opportunity to individuals to express their views in a focused and satisfactory manner.”
Industry representatives are believed to have sought effective measures to ramp up exports, ratchet up investments and spur domestic demand. They urged the government to bring back the concept of investment allowance — a tax setoff designed to spur funding in productive areas. They wanted the government to cobble measures to revive the capital market and take a call on whether excise duty and other local levies were on the higher side or not.
At a meeting with revenue secretary C. S. Rao, chairman of the Central Board of Direct Taxes (CBDT) and other top officials, the apex bodies of trade, business and industry also asked for the continuation of 10 (a) and 10 (b) benefits under the Income Tax Act. They also wanted the rate of depreciation on computers scaled back to 100 per cent from the current level of 60 per cent.
CII has sought for the continuation of section 80 I (a) and 80 I (b) if unabsorbed depreciation of business losses are not allowed to be carried forward for an indefinite time period. The chamber has also called for the removal of the withholding tax on extra commercial borrowings (ECBs) and reduction of excise duty for the textile sector.