The Hindu : Karnataka News : Industry hopes for more tax reforms

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Friday, Jan 04, 2008
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Karnataka

Karnataka

Industry hopes for more tax reforms

M. Raghuram

BANGALORE: Even while the Union Budget 2008-09 is two months away the trade bodies in the State have begun to air their grievances to the Union Finance Minister P. Chidambaram.

Most of the proposals sent to the Finance Minister speak about rationalisation of corporate and direct taxes, including personal income tax.

Federation of Karnataka Chambers of Commerce and Industry (FKCCI), Karnataka State Small Industries Association (KASSIA) and the Mangalore-based Kanara Chamber of Commerce and Industry (KCCI) has sent their pre-budget proposals to Mr. Chidambaram. They have appealed to Mr. Chidambaram to take steps to strike a balance between revenue collection and the rate of tax.

FKCCI president J. Crasta speaking told The Hindu that the tax revenue since the last budget (2007-08) had reached Rs. 1.50 lakh crore through direct taxes, but the growth of Gross Domestic Product (GDP) had come down from 9.6 to 9.2 per cent which showed that a large tax net was not an indicator of the growth. He said the FKCCI in its proposal had requested the Finance Minister to take up rationalisation of the tax structure, particularly the personal Income Tax and Corporate Tax. FKCCI president S.S. Patil said the Income Tax should be made more people-friendly and the budget should give impetus to industrial growth by achieving 10 per cent overall growth of the GDP. This was possible only through rationalisation of personal Income Tax as well as corporate tax he added. The KASSIA in its proposal has dealt more with the indirect taxes such as central excise under which a single tariff for all small industries were fixed. This would make procedures simple, minimise administrative hassles in classification and calculation. It has sought an array of reforms in duties, customs and service tax. KASSIA president told The Hindu that the present exemption limit for Central Excise should be enhanced from Rs. 1 crore to Rs. 5 crore as the economic context and industrial environment have undergone radical changes. The Micro Small and Medium Enterprises Development (MSMED) Act had raised the limit for SSI investment to Rs. 5 crore.

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