Industry meets FM; demands cut in income tax

New Delhi, Jan 8 (UNI) Industry leaders, who today had a pre-budget meeting with Finance Minister P Chidambaram, suggested a cut in corporate tax, income tax and excise duty and urged the Minister to move ahead in financial sector reforms.

They, however, asked the Minister not to effect a further reduction of custom duties until internal reforms are carried out in a caliberated manner.

Mr Chidambaram has been holding pre-budget consultations with various interest groups. Yesterday, he met experts from the agriculture sector and is slated to meet trade union leaders and economists.

The industrialists asked the government to focus on agri-reforms, strengthening manufacturing and infrastructure sectors and take steps to spur savings and investments.

While, they favoured cut in income tax, they called for widening the tax base.

They also wanted strengthening of the regulatory framwork of the various sectors.

The business community also demanded removal of minimum alternate tax (MAT) and dividend distribution tax (DDT), and a reduction in excise duty on most manufactured goods from 16 per cent to 14 per cent.

Federation of Indian Chamber of Commerce and Industry President Habil Khorakiwala said the corporate tax should be brought down to 25 per cent, which along with surcharge and education cess will work out to 28.33 per cent.

Associated Chamber of Commerce and Industry President V N Dhoot said the income tax rate should be cut to 25 per cent from 30 per cent for people with income above Rs five lakh.

Representatives of the pharmaceutical industry said the budget should give sops for research being carried out by them.

While supporting the proposal of the Finance Ministry to introduce the Goods and Services Tax (GST) by 2010, industry leaders said its rate should be pegged at 20 per cent.

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