Industry pitches for tax reduction, rationalisation of duty structure in Budget

NEW DELHI : In an effort to boost the economy, representatives of various industries on Tuesday urged Finance Minister Smt Nirmala Sitharaman to reduce the incidence of indirect taxes and rationalise duty structure wherever required.

In a pre-budget meeting with Finance Minister Nirmala Sitharaman, FIEO President Mr. Ashwani Kumar made a case for an extension of the Interest Equalisation Scheme for the next five years. “We request the scheme which is valid till 30th June, 2024 may be extended for a period of 5 years. Looking into the rise in interest rates consequent to the increase in Repo rate from 4.4 per cent to 6.5 per cent in the last 2 years, the subvention rates may be restored back from 3 per cent to 5 per cent for manufacturers in MSMEs,” Mr.Kumar said.

Mr. Kumar also urged for the establishment of an Indian shipping line of global repute to reduce foreign shipping line dependency and save foreign exchange.

Emerging from the nearly two-hour meeting, Mr. Ajay Sardana, President & Head of Petchem-Industry Affairs, at Reliance Industries, said there is a need for a review of tariffs on imported goods from China related to the petrochem industry.

“China has created a lot of overcapacity…They are putting a lot of products in India at a very cheaper price and a lot of dumping is happening. So, what we requested is a review of the tariffs regime so that the domestic capacity can be increased,” Sardana said.

Shree Cement Chairman Mr. HM Bangur said the government should spend more on capital expenditure so that the cement industry benefits. “We sought faster and simultaneous environmental clearances and no hindrance in capex,” he added.

Representing the services sector, Nasscom Vice President and Head of Public Policy Mr. Ashish Aggarwal said, “From the Budget perspective, we are looking for easing the transfer pricing regime as a lot of our industry is not able to benefit from transfer pricing provision.” Nasscom also made a case for enhancing the scope of the safe harbour regime by increasing the threshold limit from Rs 200 crore in international transactions to Rs 2,000 crore so that global capability centres can take benefit from the safe harbour, he said.

“We also suggested for strengthening of advance pricing agreement mechanism for promoting ease of doing business,” he added.

Gujarat Chamber of Commerce and Industry Vice President Mr. Sandeep Engineer said, “We represented small and medium industries. The 45-day payment window is positive but have sought some relaxation in the time cycles.” He also made a case for changing the definition of MSME and rationalisation of taxes for Limited Liability Partnership (LLP) and high net-worth individuals.