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FICCI demands across the board Income Tax rate cut in 2018-19 budget

Capital Market 

has suggested Minister Mr. Arun Jaitley to consider across the board rate cuts for businesses and individuals in the Budget for 2018-19 to spur domestic investment and demand.

President Mr Pankaj R.

Patel said at the pre-budget meeting with the industry, convened by the ministry, this move will help in retaining India's overall competitive environment globally.

stressed that many key global economies were opting for significant rate cuts -- for instance, the US is on the verge of historic reform that proposes to cut the corporate rate from a top rate of 35% to 20% as well as provide relief to individuals - and this approach should also be followed by

Although a roadmap for bringing down corporate rates to 25% was laid out in earlier budget, this is not yet implemented across the board. president also stressed on the need to consider the impact of the Dividend Distribution and the Buyback

"Together with the basic corporate tax, this pushes India's overall rate for companies well beyond 40%, which is quite high," he said.

Other measures suggested by at the meeting, also attended by senior ministry officials, includes convergence of the Goods and Services (GST) rates to 3 - 4 and inclusion of all excluded items till date, along with simplification of the compliance mechanism and removal of the applicability of GST on Intra-entity transfer of services within the same legal entity.

also pointed out that there is a need for clarity on Anti-profiteering provisions under GST, specifically related to its applicability at product or entity level, examination at State or Central level, applicability on products/ stocks prior to GST, etc.

Such clarity is important as there can be penal consequences if the taxpayer is found not complying with these obligations. Furthermore, the taxpayer should not be made liable to follow such guidelines retrospectively.

While welcoming the enactment of Insolvency and Bankruptcy Code, 2016 (IBC), also feels that considerations are important for successful implementation of insolvency schemes and provisions should not be a deterrent in achieving the policy objectives of IBC. In this regard, there is a need to exempt levy of Minimum Alternate (MAT) on write back of notional pursuant to approved plan of IBC.

Urging the government to continue its focus on productive expenditure (infrastructure capex), said if this requires relaxation of fiscal deficit target, it should be considered. (If required, Fiscal Deficit up to 3.5% of GDP can be considered).

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First Published: Thu, December 07 2017. 16:42 IST