CII admits defeat on FBT – PC hard nut - wish list for Budget 2007
CII president and Ashok Leyland. MD, R Seshasayee is reported to have conceded defeat on FBT. PC is known not to budge easily. The CII wish list for Budget 2007 includes,
1. Reduction in the peak rate of customs duty to 10 per cent from 12.5 per cent.
2. a cut in the excise duty rate to 14 per cent from 16 per cent and in the duty on processed food and agro-based products to 8 per cent from 16 per cent.
3. reduction in central sales tax to 2 per cent from 4 per cent.
4. reduction of customs duty rates on intermediaries and raw materials, including that on non-ferrous metals, to 5 per cent from 7.5 per cent.
5. raising the limit under section 80 C of Income Tax by Rs 1 lakh to encourage investments in infrastructure bonds.
6. alternative payment procedures for FBT. If FBT is not abolished, the choice should be given to tax paying firms to pay a per cent additional corporate tax on its total income in lieu of FBT
7. No surcharge on income tax to domestic companies.
8. have one single rate of taxation rather than have a number of cesses and surcharges which only complicate estimation of tax burden.
9. an increase in the depreciation rate from 15 per cent to 25 per cent for plant and machinery.
10. Hold Service Tax at 12%.
11. FBT should be levied only on element of personal benefit to employees. It should not be imposed on pure business expenses as is the norm of countries having FBT tax structure”.
12. abolish minimum alternate tax.