CII urges FinMin to reduce corporate tax

Industry body CII has approached Finance Ministry for a reduction in corporate tax to 20 per cent without exemptions and sought tax incentives on credit/debit card transactions to curb black money.
"The CII has suggested to the government that eventually a model should be evolved, where the corporate tax rate comes close to 20 per cent as exemptions are proposed to be done away with," its director General Chandrajit Banerjee said.
The current corporate tax rate is around 34 per cent (including surcharge and education cess). The proposed corporate tax rate as stated by Finance Minister is 25 per cent, which will effectively mean around 29 per cent (inclusive of surcharge and education cess).

"With exemptions being proposed to be done away with, this would also obviate the need of MAT. Eventually, there should be a very simple Income Tax Act, which would be the biggest reform that can be brought about by the Government," he added.
Moreover, in its meeting with Revenue Secretary Hasmukh Adhia here yesterday, it urged for evolving clarity on GST through consultations.
"Presuming that GST will occur sometime in 2016, industry feels that there is lack of clarity regarding the intricacies in its proposed structure, transitional arrangements, administration and procedures and framework to contain inflationary ramifications.

"In other countries, consultation on the actual proposals would have taken place in an open manner during this phase and there is no reason why it cannot be done in India," CII said.

Besides, it also suggested that the government move swiftly on the implementation of TARC (Tax Administration Reforms Commission) recommendations.
Moreover, the CII said, every effort should be made to include petroleum products, alcohol, tobacco and property in GST to have a comprehensive base of all goods and services.
Besides, duty on electricity levied by states and entertainment tax levied by local bodies should be subsumed under Goods and Services Tax (GST) and same applies for Octroi that is still levied in cities like Mumbai.
"In this connection, the CII has suggested that the Revenue Department does detailed consultation before finalising the reduction roadmap," Banerjee said.

Besides, the industry body suggested that the government appoint an implementation group consisting of professionals to oversee and monitor implementation of TARC recommendations in a time-bound manner.
"On the subject of black money, the CII has suggested promotion of banking channels including use of credit and debit cards, since they leave adequate audit trails and hence dis-incentivise black money generation.
"The government should also consider providing tax incentives for use of credit/debit cards," it stated.
The CII also advocated the philosophy of formulating laws and procedures based on mutual faith and reasonable compliances by a vast majority of taxpayers, and that focus of the law should not be on a small minority of habitual defaulters.