The Hindu Business Line : Slash corporate tax to 30 pc, says GMCI

THE Greater Mysore Chamber of Industry (GMCI) has said that the corporate tax rates should be brought down to 30 per cent to encourage investment and incentives entrepreneurship.

In a pre-Budget memorandum submitted to the Union Finance Minster, Mr P. Chidambaram, Ms Indra Prem Menon, GMCI President, said that the tax rates should be competitive with those in the neighbouring Asian economies to encourage more investments.

The Government should reintroduce investment allowance deduction. The minimum alternate tax levied should be allowed to be carried forward and set off against regular tax payable. In the absence of this process, the tax cost has increased and become an impediment for industrial growth, the memorandum said.

The cascading effect of dividend distribution tax should be withdrawn as this has created a major impediment for industries operating through a group structure.

As Indian industries enter the global economy by setting up operations abroad, there is a need for detailed guidelines and regulations on how foreign tax credit could be availed.

On indirect taxes, GMCI said that the Government should ensure that the proposed cess on all federal taxes should not have a cascading effect on prices.

The amount of cess on indirect taxes should be Cenvatable and there should be exemption for export goods from this levy.

The time limit for claiming export benefits should be raised to 120 days with further time limit of 60 days for exceptional reasons (like year-end accounts closing, audit, etc., which may create the need for additional time required for exports during the last quarter).

Cenvat on capital goods should be allowed in the year of receipt itself, instead of current practice of 50 per cent in the year of receipt and balance in the next year.

Cenvat on capital goods should be made more liberal and if the final product subject to excise levy, goods used in the production process should be eligible for Cenvat (except capital goods for guest houses, residences, etc).

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