Karnataka chambers welcome

BUDGET IMPACT

Industry associations in Karnataka have welcomed the Union Budget 2007 of finance minister P Chidambaram on Wednesday.

The Bangalore Chamber of Industry and Commerce (BCIC) welcoming the Budget stated that stability in the Budget and the long-term measures initiated will help contain inflation.

The reduction in duty on fuels is a pointer to the seriousness of containing the prices, the chamber said.

"We are encouraged by the success of VAT and the move to phase out CST," said Venkat Kedlaya, BCIC president.However, it said the extension of MAT to include IT companies, proposed FBT on ESOPs together with the dividend distribution tax, will have a negative impact on the technology sector.

Federation of Karnataka Chambers of Commerce and Industry (FKCCI) termed the budget as 'futuristic' as it addresses the issues of education, social welfare, healthcare, water system and rural development.

Though the excise duty exemption for SME sector has been raise from Rs 1 crore to Rs 1.5 crore and surcharge from IT has been withdrawn for units making profit of less than Rs 1 crore, these advantages have been negated by tax on works contract, 1 per cent cess on taxes and hike in dividend tax, FKCCI president R C Purohit said.