Pranab assures industry, will hold talks on SEZ tax
Finance minister Pranab Mukherjee on Saturday said he will consult with his colleagues on the issue of Minimum Alternate Tax on special economic zones (SEZs) and assured industry that there would be no ad hocism on long term policies.
By TNN |
NEW DELHI: Finance minister Pranab Mukherjee on Saturday said he will consult with his colleagues on the issue of Minimum Alternate Tax on special economic zones (SEZs) and assured industry that there would be no ad hocism on long term policies.
Speaking to the national council of the Confederation of Indian Industry, Mukherjee sought the industry’s support in creating a consensus on the ambitious Goods and Services Tax (GST) so that it can be implemented on schedule.
“I will discuss the issue with my colleagues and I agree that there should be no ad hocism on long-term policies,” Mukherjee said when asked whether the government would have a relook on the levy of MAT on SEZs. Commerce minister Anand Sharma has expressed concern over the issue and has written to the finance minister.
Mukherjee, in his 2011-12 Budget, raised the MAT rate to 18.5% from the current 18% and levied MAT on developers of SEZs as well as units operating in these tax-free enclaves. The issue has met with strong criticism from SEZ developers and IT units which have shifted to SEZs to avail tax benefits. Analysts say the tax will have an impact on SEZs and many developers may be forced to surrender their projects.
Mukherjee urged the industry leaders help the government in creating the right environment for taking forward GST. “No reform is possible if there is no social acceptability of reform and unless the ground is prepared,” he said while calling for support from industry so that key financial sector reforms outlined in the Budget are implemented.
The government intends to present at least six bills in Parliament to accelerate financial sector reforms. A string of scandals which hit the headlines since last year, has slowed policy making and the investment climate and analysts say the government must act to reverse the trend.
Mukherjee has said the government will introduce the Constitution amendment bill in the current session of Parliament and work is also underway on drafting of a model legislation for the central and state GST. But implementing GST, the country’s most ambitious tax reforms law, by April 1, 2012 maybe an uphill task as consensus among states is yet to evolve on key issues.
The finance minister also said that the government will take up the issue of revising the Agriculture Produce Marketing Committee Act with state governments. The finance minister in his Budget had highlighted the need for state government to review and enforce a reformed APMC Act urgently to prevent spike in prices of vegetables and fruits.
Earlier, speaking to reporters after meeting the Reserve Bank of India’s board, Mukherjee said the government’s borrowing programme in 2011-12 would be rolled out in a manner that will ensure there is no problem for the private sector in getting funds.
Speaking to the national council of the Confederation of Indian Industry, Mukherjee sought the industry’s support in creating a consensus on the ambitious Goods and Services Tax (GST) so that it can be implemented on schedule.
“I will discuss the issue with my colleagues and I agree that there should be no ad hocism on long-term policies,” Mukherjee said when asked whether the government would have a relook on the levy of MAT on SEZs. Commerce minister Anand Sharma has expressed concern over the issue and has written to the finance minister.
Mukherjee, in his 2011-12 Budget, raised the MAT rate to 18.5% from the current 18% and levied MAT on developers of SEZs as well as units operating in these tax-free enclaves. The issue has met with strong criticism from SEZ developers and IT units which have shifted to SEZs to avail tax benefits. Analysts say the tax will have an impact on SEZs and many developers may be forced to surrender their projects.
Mukherjee urged the industry leaders help the government in creating the right environment for taking forward GST. “No reform is possible if there is no social acceptability of reform and unless the ground is prepared,” he said while calling for support from industry so that key financial sector reforms outlined in the Budget are implemented.
The government intends to present at least six bills in Parliament to accelerate financial sector reforms. A string of scandals which hit the headlines since last year, has slowed policy making and the investment climate and analysts say the government must act to reverse the trend.
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Mukherjee has said the government will introduce the Constitution amendment bill in the current session of Parliament and work is also underway on drafting of a model legislation for the central and state GST. But implementing GST, the country’s most ambitious tax reforms law, by April 1, 2012 maybe an uphill task as consensus among states is yet to evolve on key issues.
The finance minister also said that the government will take up the issue of revising the Agriculture Produce Marketing Committee Act with state governments. The finance minister in his Budget had highlighted the need for state government to review and enforce a reformed APMC Act urgently to prevent spike in prices of vegetables and fruits.
Earlier, speaking to reporters after meeting the Reserve Bank of India’s board, Mukherjee said the government’s borrowing programme in 2011-12 would be rolled out in a manner that will ensure there is no problem for the private sector in getting funds.
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