CII calls for increased incentives on infrastructural spendings

New Delhi, Jan 28 (UNI) Emphasising that infrastructure spending must increase to at least six per cent of GDP in 2007-08 from the current level of five per cent, industry chamber CII today suggested a number of fiscal incentives to boost the sector.

The chamber said the fiscal benefits available under section 80-IA to power projects should be extended till 2015 instead of March 31, 2010 at present. The extension is required since the government's plans for the Ultra Mega Power Projects of 4,000 MW each will take shape only after 2010.

It has also stressed that the fiscal benefits available to an undertaking engaged in the generation of power should be continued on shifting of such undertaking from one place to another.

In order to improve the status of power transmission and distribution in the country, CII suggested that the benefits under section 80-IA be extended to companies which have invested in modifying the existing network of state governments after acquiring them.

Currently this benefit is available only to companies that are engaged in transmission and distribution of power and have laid down the new network lines after first day of April 1999.

Improving the general status of infrastructure in the country, according to CII, requires exempting infrastructure companies from the purview of MAT.

It may be noted that though the infrastructure companies are exempted from payment of any tax for a period of 10 years under section 80-IA of the Income Tax Act, the imposition of MAT under section 115-JB has substantially diluted the incentive provided under section 80-IA, the chamber said in a statement.

This has resulted in a peculiar situation as the fiscal incentives bestowed by the government on the selected sectors are being taken away in another form, said the statement.

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