New Delhi, Nov 26 (UNI) CEOs and MDs of premier industrial sectors have urged Finance Minister P Chidambaram to abolish Fringe Benefit Tax (FBT) on normal business expenses in his forthcoming budget proposals for 2008-09, a study released by Industry body Assocham said today.
The survey on Pre-Budget Preferences of corporates on FBT, where views of over 400 CEOs and MDs were obtained, 80 per cent of them argued that distribution of gifts is prevalent in industries like garment, white goods, FMCG, small accessories and automobile, which currently are under pressures for margins and thus removal of FBT on sales promotion expenses would provide them a great relief.
''Subjecting FBT on dealer meetings conducted by various business promoters to discuss business strategies should also not be subjected to FBT,'' Assocham President Mr Venugopal N Dhoot said while releasing the findings of the study here.
He pointed out that he had personally taken up this issue with the revenue officials of the Finance Ministry, while submitting the Chamber's Pre-Budget Memorandum to them.
However, 65 per cent of CEOs and MDs pointed out that instead of FBT, which is a burden on most corporates, the Finance Ministry should subject large farmers into tax net. The Agricultural income should be classified in a manner so that medium and marginalised farmers only escape taxation on agricultural income and that large farmers are subjected to it, they said.
On the issue of Corporate Tax, 55 per cent of them aired their voice by collectively expressing that surcharge on Corporate Tax which is 2.5 per cent currently should be abolished and 30 per cent Corporate Tax rate imposition should continue.
About 60 per cent of them even offered that their annual turnover could be taxed to the extent of one per cent provided FBT is abolished on identified and suggested expenses and money generated out of it be used for irrigation purposes.
Majority of CEOs and MDs expressed their concern on rising crude oil prices and their impact on Indian economy.
They also sought for reduction of subsidies that go into fertiliser and food sector, besides petroleum arguing that the intended subsidies never reach the targeted lot and therefore the Finance Ministry should utilise stringent channels for disbursement of subsidies through establishing a sound monetary mechanism instead of taxing corporates on small and petty issues by taxation like FBT.