One-time Amnesty for Foreign Funds - FICCI Recommends
IN a meeting with the Finance secretary RS Gujral, a FICCI delegation suggested a one-time amnesty scheme to encourage Indians to bring back their overseas wealth. FICCI also suggested
++ Rationalize MAT: Capital intensive projects with long gestation period are unable to recover MAT by way of set-off from future tax liability during specified period of 10 years. MAT rate should therefore be rationalized from a high 20 per cent (approx including surcharge and education cess) to a more reasonable level.
++ Streamline Transfer Pricing Regulations: Introduce Safe Harbour rules for captive Business Process Outsourcing; issue guidelines to recognize approaches for evaluating arm's length character of transactions involving marketing intangibles; introduce appropriate guidance on pricing of inter-company funding;
++ Foreign Exchange Transactions: India has seen huge volatility in the foreign exchange rates. To avoid hardship on the taxpayers, losses on account of foreign exchange should be allowed as revenue expenditure including unrealized year end mark-to-market losses and forex derivative and hedging transactions should be specifically excluded from the definition of speculative transaction.
++ Service Tax: Expansion of scope of the term 'input services' under Cenvat Credit Rules, 2004 so that credit of all the services used in business is available; clarity on point of taxation in case invoice is raised or services are provided before services became taxable; threshold limit should be applicable even in case of payment of service tax under reverse charge; extension of time limit for revision of service tax return; recipient of service should not be made liable for non-issuance of invoice by the service provider in cases where liability to pay service tax is on recipient and adjustment of excess or short payment of service tax to be permitted within the same financial year, without any monetary limit.