PHD Chamber seeks capital gains tax rationalisation, doing away with BCD on feedstock

New Delhi: Industry chamber PHD Chamber of Commerce and Industry has urged the government to abolish long-term capital gains (LTCG) tax on equity investments, halve the short-term capital gains (STCG) tax to 10% and lower securities transaction tax (STT) rates.

In its pre-Budget recommendations for FY28 submitted to finance ministry Tuesday, it also suggested to improve access to equity financing for businesses particularly MSMEs, eliminating basic customs duty (BCD) on rayon-grade wood pulp, LNG, naphtha and certain heavy petroleum feedstocks, while seeking lower duties on petroleum coke used in aluminium manufacturing.

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“Strengthening India's manufacturing competitiveness requires a comprehensive approach to reducing the cost of critical industrial inputs. Energy and feedstock costs have a cascading impact across multiple sectors, influencing production economics, investment decisions and the competitiveness of downstream industries,” said Anil Gupta, President, PHDCCI.

To promote the domestic manufacturing ecosystem in consumer durables and electronics, the chamber has proposed increasing the BCD to 20% on imports of finished Completely Built Units of washing machines, dishwashers, vacuum cleaners and robotic vacuum cleaners besides localisation of components and strengthening the competitiveness of Indian manufacturers.

The industry body has also called for the continuation of the existing customs duty framework on steel scrap beyond March 2028, arguing that competitive access to critical industrial inputs is essential to lowering manufacturing costs and improving India’s global competitiveness. A predictable duty framework would help ensure access to the raw material for steelmakers and support downstream sectors such as construction, infrastructure, automobiles, engineering and capital goods, it said.

The chamber has also sought an increase in loan ceilings under the Pradhan Mantri MUDRA Yojana (PMMY), proposing limits of Rs 1 lakh under Shishu, Rs 10 lakh under Kishore and Rs 20 lakh under Tarun and Tarun Plus categories.

Another key recommendation is to extend the overdue period for classifying MSME loans as non-performing assets from 90 days to 180 days, citing longer working capital cycles and delays in realisation of receivables.