India Inc on Tuesday made a strong pitch to cut corporate and personal tax rates in the budget for 2008-09 and sought fiscal sops to protect the domestic capital goods industry's competitiveness.
Videocon Chairman and Assocham President Venugopal Dhoot sought abolition of the 10 per cent surcharge on corporate tax, removal of the fringe benefit tax (FBT) on business promotion expenses and a reduction of the excise duty to 12 per cent.
"We have sought a hike in the ceiling of personal taxation and for individuals with an annual income of Rs 5 lakh the tax rate should be brought down to 25 per cent," Dhoot said after the pre-budget meeting with Finance Minister P Chidambaram.
Federation of Indian Chambers of Commerce and Industry President Habil Khorakiwala said there was a need to reduce the excise duty from 16 per cent. "The customs duty rate of 10 per cent should be retained for some time, and further reduction should be calibrated with internal reforms," Khorakiwala said.
Industry also wanted imposition of higher anti-dumping duties on Chinese products, particularly capital goods, in the wake of the persistent rupee rise.
"The rupee's appreciation has been troubling us. But we have special problem with China. The rupee floats, but the Chinese currency has been suppressed by 35 per cent," Larsen & Toubro Chairman AM Naik said.
Sources said Chidambaram was of the view that industry and services needed to sustain high growth rates, as a 4 per cent growth rate in agriculture alone would not help sustain GDP growth within 9-10 per cent.
Confederation of Indian Industry President Sunil Bharti Mittal said, "Since lower tax rates have yielded more revenue, we have requested the finance minister to further cut corporate tax rates."