The Federation of Indian Chambers of Commerce and Industry (Ficci) has suggested setting up of a tariff commission in its pre-budget memorandum to the government.
It has said that the tax reforms so far have been Centre-led. Unless the reforms in central level taxes are dovetailed with reforms in state taxes, efforts towards rationalisation will remain unsuccessful, a Ficci release said.
It said there is a need to replace the existing indirect tax system with value added tax.
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The chamber pointed out that the predominant view is that India should have a dual VAT under which a central VAT will co-exist with state value added taxes.
In Ficcis view, the tariff policy should stimulate export efforts by facilitating import of essential raw materials, intermediates and components that are not produced within the country.
A three-tier import tariff structure will ensure growth and diversification of domestic industry, it said.