| The Bombay Chamber of Commerce and Industry (BCCI) has putforward a series of recommendations for the next budget to the ministry of finance.
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| The organisation observed that steps should be taken to make the industries and services more competitive and to make the economy more market and investor friendly. The chamber also highlighted the importance of improving the tax system to speed up economic growth.
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| The existing Central Sales Tax (CST) in India imposes a 4 per cent tax on inter-state movement of goods. This results in price rise. "Because of CST, the Indian market is fragmented as manufacturers prefer to confine their production base within the state," said Nihal Kothari, Advisor Taxation Policy, BCCI.
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| The chamber has suggested to do away with CST so that the production cost and distribution cost can be brought down. "This will reduce the production cost and goods will be available at a cheaper rate and the market will expand," Kothari added.
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| CST is levied when goods are carried from one state to another. It prevents the development of a common market, say the chamber members. "We want India to be a common market so that the manufacturing cost is reduced," Kothari added. The chamber said the government needs to work on goods and services tax, merging the sales tax and excise tax together.
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| For attracting investments, the chamber stresses the importance of infrastructure development. And for this, the government needs to have more revenue. At the moment, the service tax constitutes half of the Indian GDP.
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| "However, the service tax makes up only 3-4 per cent of the whole revenue as only 81 services have been recognised by the government for taxes. We have recommended that this should be increased to 150 so that revenue generation is increased," said Kothari. This year the expected revenue from the service sector is around Rs 18,000 crore. |
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