India Inc wants reduction in excise on cars

India Inc has prepared its wish-list for the 2008-09 budget which includes...

India Inc has prepared its wish-list for the 2008-09 budget which includes reduction of excise duty on motor cars, abolition of the Minimum Alternative Tax, removal of surcharge on corporate tax and review of the Fringe Benefit Tax.

“The Government should reduce excise from 24 to 14 per cent on cars, multi-utility vehicles and petrol driven goods transport vehicles,” the Confederation of Indian Industry (CII) said in its pre-budget memorandum. The chamber suggested that the focus of the next budget should be on transforming India from a “labour arbitrage economy to knowledge arbitrage economy”.

The chamber wanted the Government to lay special emphasis on skill development and rural economy by providing fiscal incentives. It suggested that expenditure incurred by the industry on training and retraining programmes should be made eligible for tax exemption as is the case with research and development activities.

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The CII said the Government should either abolish MAT or reduce its incidence to 5 per cent. With regard to excise duty, the CII demanded that the Central Value-Added Tax rate be reduced from 16 per cent to 14 per cent. The CII also suggested modification of definition of trading and investing activities in the stock markets.

The chamber demanded removal of the Dividend Distribution Tax, which is levied on dividends paid by the companies.

To encourage exports, the chamber suggested that Government should “provide relief to exporters” by reintroducing deductions available under sections 80HHC and 80HHE of the Income Tax Act.

Wish List 2008-09

•Reduction of excise duties from 24 per cent to 14 per cent on automotives

• Abolition of MAT or its reduction to 5 per cent

• Scrapping of DDT or its reduction to 5 per cent

• Dropping of corporate tax surcharge & review of FBT

• Reduction of CENVAT from 16 to 14 per cent