Imposition of MAT a retrograde step: FIEO
Dr R K Dhawan, Chairman (NR), Federation of Indian Export Organizations (FIEO) has expressed disappointment and stated that the imposition of MAT at this juncture when the tax holiday on the said sections have a sunset clause (valid till 2009) tan...
By INDIATIMES NEWS NETWORK |
NEW DELHI: Commenting on the imposition of MAT on Sec 10A & 10B of the Income Tax Act, Dr R K Dhawan, Chairman (NR), Federation of Indian Export Organizations (FIEO) has expressed disappointment and stated that the imposition of MAT at this juncture when the tax holiday on the said sections have a sunset clause (valid till 2009) tantamount to reneging on commitments made by the Government to the trade & industry including the IT sector.
While the export sector is suffering high transaction costs, and competitor countries (like Malaysia, Indonesia & China etc) are offering attractive tax havens to investors, in such a scenario the imposition of MAT would further reduce the competitive edge making India less investor friendly.
Dr Dhawan stated that the levy would entail an additional tax liability of 11.22% of the adjusted book profits further reducing competitiveness.
MAT imposition on Sec 10A & 10B of the Income Tax Act covers entities established in the Free Trade Zones (FTZs), Electronic Hardware Technology Parks (EHTP), Software Technology Parks (STP) u/s 10A and the 100% EOUs u/s 10B of the Income Tax Act.
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