Chambers Differ On Mat, Fera

Leading chambers of commerce and industry differ on the contentious issue of minimum alternate tax (MAT) but are unanimous in demanding a review of the Foreign Exchange Regulation Act and income tax laws.

While the Associated Chambers of Commerce and Industry (Assocham) and Federation of Indian Chambers of Commerce and Industry have demanded immediate withdrawal of MAT, the Confederation of Indian Industry has soft-peddled the issue saying MAT could at best be an interim measure.

Imposition of MAT is anti-growth and a retrograde step and is strongly recommended for total withdrawal, Assocham president HL Somany said.

Ficci and Assocham had opposed MAT even before it was introduced in the last budget. However, CII has taken a consistent stand of supporting the provision to tax zero tax companies.

 

We sincerely hope that MAT would be scrapped, Ficci president AS Kasliwal said.

PHD Chamber of Commerce and Industry president Binay Kumar said the repercussions of MAT affected the competitiveness of companies. The Assocham president said if MAT was not withdrawn for some reason, the tax paid under the provision should be treated as advance tax and credit given in the subsequent years against the tax liability. But Datta said with the harmonisation of depreciation rates under it and Companies Act, it is expected the impact of MAT would be diluted.

Another issue that haunted the corporate magnates last year was the continuance of a stringent regime under the Foreign Exchange Regulation Act (Fera).

We expect a total overhaul of Fera to make it in tune with the realities, Kasliwal said.

The Act has become outmoded and outdated in the present milieu of liberalisation,

CII believes that the government will come out with a comprehensive amendment of Fera and IT laws which is in tune with the emerging liberalised scenario.

Kasliwal said Fera has outlived its utility and should be renamed as Foreign Exchange Monitoring Act, particularly when the country is moving towards a regime of full convertibility.

He said personal income tax and corporate tax should be brought down considerably.

He said personal income tax and corporate tax should be brought down considerably.