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Reduce corporate tax rate, increase infra investment: India Inc tells FM

CII President Vikram Kirloskar suggested bringing down the dividend distribution tax to 10 per cent from the present 20 per cent

Press Trust of India  |  New Delhi 

Finance Minister, Nirmala Sitharaman
Nirmala Sitharaman

Inc Tuesday made a case for reduction in corporate rate, abolition of minimum alternate tax, halving distribution to 10 per cent and increase in outlay for infrastructure sector in the upcoming Budget with a view to arrest economic slowdown.

Representatives of industry chambers made these suggestions during their customary pre-budget consultation with Nirmala Sitharaman, who on her part, recalled the steps taken by the government since 2014 to improve the country's business climate. Sitharaman will present the first Budget of the Modi 2.0 government on July 5.

In the meeting, suggested bringing down the distribution to 10 per cent from the present 20 per cent, saying it should also be not taxed at the hands of the investor.

In her opening remarks, Sitharaman said since 2014 the government has taken measures to simplify and rationalise existing rules and introduced in a big way to make governance more efficient and effective.

As a result, she added, has considerably improved its ranking to 77th position among the 190 and has kept 23 ranks over its rank of 100 in the Doing Business Report 2018 as per the Doing Business Report, 2019.

Sitharaman also said that industry should accommodate more work force to reap the benefits of demographic

Union Finance Minister Nirmala Sitharaman and MoS for Finance Anurag Thakur (right) during a pre-budget meeting on Tuesday.  Both ministers held consultations with different stakeholder groups from industry, trade and services
Union and MoS for Finance Anurag Thakur (right) during a pre-budget meeting on Tuesday. Both ministers held consultations with different stakeholder groups from industry, trade and services


Among other things, B K Goenka recommended that 100 per cent depreciation should be permitted in the first year of investment for all new investments.

"In order to further simplify GST, we propose a dual rate (8% & 16%) structure for GST'," Goenka said.

Suggesting upward revision of the income tax slabs for individuals, demanded that the highest tax rate of 30 per cent should be applicable only for income above Rs 20 lakh. It also sought reduction corporate tax rate to 25 per cent. Indian businesses are bearing high tax cost as corporate tax rate along with dividend distribution tax pushes India's overall tax rate for beyond 50 per cent, which is quite high.

With a view to give boost to Indian economy, industry representatives submitted several suggestions with regard to land reforms, special economic zones, industrial policy, investment in research and development, simplification of tax regimes, tapping potential in tourism sector, Foreign Direct Investment (FDI), Goods and Services Tax (GST), Capital Gains Tax, Corporate Tax, among others.

suggested that a simplified taxation regime is pivotal for improving the revenue flows and help government stick to fiscal prudence without crowding-out private investments.

"For this to fructify, a timeline for a Taxation regime (Direct Tax) needs to be announced where the highest rate should be 18 per cent, in addition to removing all exemptions and not doing grandfathering," Kirloskar said.

President suggested that to provide a major sector, the government must announce a few major projects in sectors such as roads and highways, sub-urban metros and airports.

First Published: Tue, June 11 2019. 20:10 IST
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