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Industry bodies demand removal of MAT

Industry bodies CII and FICCI have asked the government to either withdraw or reduce the Minimum Alternate Tax, as it plans to withdraw exemptions on corporate taxes.

twitter-logo Dipak Mondal        Last Updated: January 6, 2016  | 19:25 IST
Industry bodies demand removal of MAT
Industry bodies CII and FICCI have asked the government to either withdraw or reduce the Minimum Alternate Tax, as it plans to withdraw exemptions on corporate taxes. (Photo: Reuters)

Industry bodies CII and FICCI have asked the government to either withdraw or reduce the Minimum Alternate Tax (MAT), as it plans to withdraw exemptions on corporate taxes.

In their recommendations for Budget 2016/17, the industry bodies have said that though they welcome the move to remove exemptions, they also think that MAT should be withdrawn or the rate should be reduced in a calibrated manner.

CII in its statement said that "while removing MAT, it should be clarified that MAT credit can be carried forward and set-off against their normal tax liability in future".

FICCI, on the other hand, said: "As the government draws up a plan to eliminate exemptions and reduce the corporate tax rate, we feel that it must simultaneously look at reduction in the Minimum Alternate Tax rate."

Both industry bodies requested implementation of the Tax Administration Reforms Commissions recommendations to overhaul the tax administration of the country.

The Commission, headed by Dr Parthasarathy Shome, has recommended sweeping changes in the way the revenue department functions. It calls for the tax department to shift its focus from being an enforcement agency to being a service provider to taxpayers. The committee first submitted its report on 16 June 2014.

CII said that the government should appoint an implementation group consisting of professionals to oversee and monitor implementation in a time-bound manner. "Whatever is recommended need not be implemented in entirety," it said in its submission to the finance ministry.

FICCI in its representation said that the government should "give up the policy of setting tax collection/revenue targets for tax officers, since tax collections vary with the economic cycle/business conditions. Judiciousness and fairness in the assessment orders passed by the officers should be made a criterion for performance appraisal of the assessing officers".

On the issue of reduction of corporate tax, CII feels that the rate of tax should be 22 per cent (inclusive of surcharge and no other additional levies should be imposed over and above this rate) and not 25 per cent.

Among other demands include tax incentive for using plastic money, removal of mandatory pre-deposit for filing appeals in tax matters, offering 3 per cent interest rate subvention for home loan taken up to Rs 10 lakh, etc.

 

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