With the Goods and Services Tax (GST) regime on the backburner, leaders of top Indian companies have demanded a 1 percentage point reduction in Central Sales Tax from the current 2%.
In a pre-budget meeting with finance minister Pranab Mukherjee on Tuesday, they also sought a reduction in corporate tax from the current 30% to 25%, in consonance with the global average and rationalisation of Minimum Alternate Tax (MAT).
FICCI president Rajan Bharti Mittal has suggested abolition of surcharge and education cess and removal of the cascading impact of Dividend Distribution Tax. “The government should restore withholding-tax exemption on interest payable on foreign commercial borrowings,” Mittal suggested.
The Confederation of Indian Industry (CII) has emphasised the need to introduce a common market for agricultural produce across states and the opening up of FDI in multi-brand retail, apart from allowing higher FDI in the defence sector.
"In the face of rising input costs, tight liquidity conditions and rising interest rates, the coming budget should focus on maintaining and accelerating the pace of economic recovery and speed up employment generation," said CII president Hari Bhartia. "Inflation is very high, so the income tax exemption limit should go up to give relief to common man and efforts should be made to have 10% GDP on a sustainable basis."
Focussing on infrastructure development, PHD Chamber suggested an appropriate regulatory framework for encouraging inflow of FDI in infrastructure.
"MAT needs to be scaled down to a maximum of 15% as against the current 19.93%," said Videocon chairman Venugopal Dhoot.
On exports, Federation of India Export Organisations has demanded tax benefit similar to export-oriented units for small-scale entrepreneurs exporting more than 75% of their production.