New Delhi, Nov. 20: The Federation of Indian Chambers of Commerce and Industry (Ficci) has sought complete withdrawal of the fringe benefit tax (FBT) in its pre-budget memorandum submitted to the finance ministry.

“In case some portion of the expenditure has to be deemed as fringe benefits accruing to the employees, then these should be disallowed as deduction to the employer, instead of being taxed separately in his hands,” the memorandum said.

Only benefits that are enjoyed collectively by the employees and cannot be attributed to individuals should be taxable in the hands of the employer, it added.

The chamber has also proposed further cuts in tax rates, but a lower fiscal deficit target of 4 per cent of the GDP in the budget for 2006-07.

Ficci has warned that unless domestic oil rates are rationalised to offset the high prices paid for imported crude, savings of oil PSUs would be seriously curtailed.