Cos seek cut in corporate tax rates

NEW DELHI: India Inc has made a strong pitch for cut in corporate tax rates and expeditious implementation of Goods and Services Tax. The recommendations come in the wake of gloomy economic conditions, high interest rates and weak investor sentiments stressing out corporate bottom lines.

At a pre-budget meeting with Finance Minister, industry representatives also expressed concern over the burgeoning fiscal deficit for the current fiscal. "At present, government is suffering serious fiscal pressure, causing great anxiety," said Ficci in a press release after the meeting. Ficci also suggested introducing a one time amnesty scheme to encourage Indians to bring their overseas wealth back to the country as part of the measures to bolster revenues.

At the meeting, CII suggested widening the service tax base and including services like rail fares and freight under the tax net.

"Along with pressing for a further interest rate cut by 50 basis point, we have asked the government to reduce corporate tax by 2-3% given the financial scenario of the country," said Rajkumar Dhoot, President of Associated Chambers of Commerce.

Some others have suggested that corporate tax rates, if not decreased, should be maintained at the same level while Minimum Alternate Tax should be rationalized. "We have made a case for retaining tax rates at the present level. There should be no increase in corporate tax, service tax and excise," said RV Kanoria, president, Ficci. "MAT should not exceed 50 % of the basic corporate tax rate," Kanoria added.

Industry leaders have further asked for exemption of the infrastructure sector, SEZ as well as health care sector from the ambit of the MAT along with extension of infrastructure status to aviation, telecom, healthcare and education sectors.

"We asked for giving infrastructure status to healthcare and education sector. We also sought speeding up of PSU disinvestment, widening tax net and implementing GST as fast as possible," said CII President B Muthuraman. "I hope that to ensure cheap and effective healthcare in the industry, healthcare is kept out of the negative service tax list under GST," said Naresh Trehan, CMD, Medanta.