Industry chambers have urged the Finance Ministry to further rationalise direct taxes and give a blueprint for disinvestment. Three chambers met Revenue Secretary Sanjay Malhotra on Thursday and made a detailed presentation for the Union Budget for Fiscal Year 2024-25 (FY25).
While the date for the budget has not been finalised, it is expected to be presented on February 1.
CII’s wish-list
In its presentation, the Confederation of Indian Industry (CII) placed a 13-point wish-list starting from overall direction to tax proposals to disinvestment blueprint and to sector specific demands. Talking about taxation, the chamber suggested that barring few goods in higher slabs, government should keep the customs duties low with lowest or nil slab for inputs or raw materials, intermediates in the lower slab (2.5-5 per cent) and final products in the standard slab.
The chamber called for bringing down its stake in PSEs to 51 per cent, so that it retains its position as the single largest owner of the PSE. Also, a task force should be created to suggest which PSEs to disinvest and the timeframe for the same. Besides, the Department of Investment and Public Asset Management (DIPAM), in consultation with the concerned line Ministry of these PSEs, should formulate a 5-year roadmap for disinvesting government’s stake with well-defined targets for each year.
“With the kind of progressive budgets that we have seen in the last few years, we are very hopeful that the trend would continue and we shall see a strongly growth-oriented budget. Especially important would be to see how the budget gives a boost to consumption and also gets private sector investments to kick start again,” Chandrajit Banerjee, Director General of CII said.
Suggestions from FICCI
In its presentation, the Federation Of Indian Chambers Of Commerce and Industry (FICCI) suggested that there be only three rate structures for TDS payments: TDS on salary at slab rate, TDS on lotteries/online games. etc. at maximum marginal rate and two standard rates for TDS for different categories. B2B payments which are subject to GST may be exempted from TDS. It called for the introduction of a new independent dispute resolution forum for effective and time bound dispute resolutions. Further, it suggested de-listing of listed subsidiary of listed parent in compliance with guidelines issued by Securities Exchange Board of India (SEBI), to be made tax-neutral for shareholders and companies.
The chamber urged instructions be issued to the Customs Authorities to provide for a single COO (Certificate of Origin) be accepted by the authorities against multiple BOEs (bill of entries) to the extent of total quantity and value mentioned in COO.
According to the chambers, the Government may consider introducing an Amnesty Scheme under the Customs, for providing opportunity to taxpayers to clear the past baggage and reduce the litigation. This should include complete waiver of interest and penalty along with a one-time settlement scheme.
PHDCCI’s representation
Hemant Jain, President, PHD Chamber of Commerce and Industry (PHDCCI), advised that peak rates under corporate tax needs to be reduced for Partnership Individuals and Limited Liability Partnership firms at 25 per cent. Since the long-term capital gain on shares is at parity with long-term capital gain on other assets, it is requested that the security transaction tax may be abolished, he said. It also suggested to expand the PLI scheme beyond the 14 sectors to include medicinal plants, handicrafts, leather and footwear, gems and jewellery, alongside the space sector, among others.