CII bats for lowering corp tax to 25%, rationalising TDS norms in pre-Budget meet

New Delhi, May 27 (PTI) Industry body CII Monday suggested lowering of corporate tax to 25 per cent irrespective of turnover and rationalisation of TDS provisions in its pre-Budget consultation with the finance ministry.In a meeting with Revenue Secretary Ajay Bhushan Pandey, CII said peak customs duty should be maintained in the 2019-20 Budget to help domestic industry."To fire the four engines of consumption, investment, government spending and exports, it is essential to reduce income tax burden and expand the scope of investment allowance to all sectors. "There is need for higher export incentives to help Indian exporters address the cost disadvantage in global markets," CII President Vikram Kirloskar said.The industry chamber in its presentation said reduction in corporate and personal income tax rates will boost investments and consumption leading to better growth prospects.Observing that the US and the UK have lowered their corporate tax rates to 21 per cent and 17 per cent respectively, CII said India should also cut it to 25 per cent for all companies.It said India has one of the highest corporate tax burdens among comparable economies. In addition to corporate tax and dividend distribution tax, MAT is also levied. A lower tax rate is the need of the hour for growth and investments."Government may also consider announcing a roadmap for tax policy over the next 5 years in order to attract investments," CII Director General Chandrajit Banerjee said. The government in 2015-16 Budget promised that the corporate tax rate would be gradually lowered to 25 per cent from 30 per cent over the next four years and exemptions available to companies would be phased out.In the Budget, 2017, the government reduced corporate tax rate to 25 per cent for companies whose turnover was less than Rs 50 crore in financial year 2015-16. This benefitted 96 per cent of the total companies filing tax returns. In the Budget 2018-19, the reduced rate of 25 per cent was extended to companies with turnover of up to Rs 250 crore in 2016-17, a move which benefited micro, small and medium enterprises. After this, out of about 7 lakh companies filing returns, about 7,000 which file returns of income and whose turnover is above Rs 250 crore remain in 30 per cent slab. The full budget for 2019-20 could be announced sometime in July. Post general elections in 2014, budget was presented on July 10. As part of the rationalisation of TDS provision, CII suggested that the time limit of 7 years provided to residents should be extended to non-residents also.CII also recommended that the government implement the Easwar Committee recommendation with regard to prosecution in TDS deposit default cases.The Easwar Committee suggested that no prosecution should be launched where tax being deposited late isso done along with interest and where the same has been paid voluntarily within 12 months from the date of deduction. The CII also suggested that dividend distribution tax should be rationalised to 10 per cent and taxed at the hands of the recipient. It also called for removal of Long Term Capital Gains tax on equities and MAT.CII also recommended extension of weighted deduction for R&D for a further period of 10 years and mandatory CSR expenditure be allowed to be treated as business expenditure. PTI JD CS ANUANU