Hike in DDT and extension of MAT upsets corporate India

Mumbai, Feb 28 (UNI) Corporate leaders in the financial hub of the country were left disappointed with the hike in Dividend Distribution Tax (DDT) and extension of Minimum Alternate Tax (MAT) in the Union Budget 2007-08 presented today.

Mr Bharat Vasani, Group Consulting General of Tata Sons Ltd, expressed his dissatisfaction, saying there were three quick negatives in the Budget which had created a situation of double whammy before the industry.

''Increasing the DDT from 12.5 per cent to 15 per cent and extension of MAT 10 (A)&10 (B) of Income Tax Act will have great impact on the information technology and other related industries,'' he said.

Extension of Fringe Benefit Tax (FBT) to ESOP (Employees Stock Option Plan) will prove taxing to the companies. By taking these steps, the Government has gone stepped back from its earlier promise of keeping IT companies untouched until 2009, he said.

The industry, however, welcomed the reduction of Central Sales Taxes (CST) from existing four per cent to three per cent.

Mr S M Kulkarni, Sr General Manager, Corporate sales, Mahindra&Mahindra Ltd and the Chairman of the Indirect Taxation Committee as formed by the Bombay Chamber of Commerce and Industry (BCCI), said, ''The reduction of CST to 3 per cent was very much on the expected lines and it will surely have its positive impact on the industry.'' However, he said the imposition of Value Added Tax (VAT) in addition to the existing services tax was ''haunting''.

The banking community also welcomed the introduction of Mortgage Insurance.

Talking to UNI, Mr Shailendra Bhandari, Managing Director and CEO of Centurian Bank of Punjab said, ''Though the concept is quite old abroad, it has been introduced for the first time in India.'' He stressed that it will have its wide ramifications on the banking community which will now go on the spree of adding separate arms to their wings to encash mortgage insurance.

''No matter if actual loss on this front was quite low in the country,'' he added.

Director of 3i Pvt Ltd, Mr Mahesh Chhabria said, ''The Budget could have been more taxing. But in the light of inflationary pressures and the ensuing Assembly elections in some states, the Government was left with a Hobson's Choice of presenting this populist Budget.'' UNI