India Inc is likely to get some breather in the Budget with Finance Minister P Chidambaram saying on Wednesday that the government will simplify the dreaded Fringe Benefit Tax.
However, there is no move to completely abolish or withdrawing the tax, he asserted during an interaction with press corps at the Forum of Financial Writers.
The controversial tax was introduced by Chidambaram in Budget 2005-06 in February last year and has been strongly opposed by various industry chambers.
During their pre-budget meeting with Chidambaram a few days ago, all leading industry bodies including CII, FICCI and Assocham had pitched for scrapping or simplifying FBT.
"There is a need to review the FBT provisions and simplify it. Genuine business expenditure incurred by corporates should be allowed deduction," FICCI vice-president N Srinivasan had said.
Assocham president Anil K Agarwal and senior Vice president Venugopal N Dhoot had suggested that the Finance Minister should hike corporate tax by two per cent to offset losses that government will incur on account of removal of the FBT.