Pl see attached from the Madras Chamber of Commerce & Industry.
R Subramanian
Secretary General
MCCI
Karumuttu Centre, I floor
634 Anna Salai, Nandanam,
Chennai 600035
Tel: 044-24349452/24349871
Fax: 044-24349164
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The Madras Chamber of Commerce & Industry:
MCCI’s Budget wish list - by Srinivasan K Swamy, President
1.Stimulus package :
1.1 Suitable Fiscal & monetary policy coined to ensure that the pressure from the Bankers to the industries annihilated by “ abolishing Additional interest & penal interest till the economy comes to normalcy.” An ideal rate not exceeding @ 9% p.a. is suggested. It is also felt that banks should re-operationalise / accelerate the mandatory clause – “re-structuring “ This will enhance the economic growth.
1.2 In the current economic scenario of downturn, the credit rating of companies can be kept in abeyance for 2 to 3 years. There should be a mechanism in place, even if the rating is inadequate the banks should not go by it for sanctioning loans, till manufacturing & exports pick up its momentum.
1.3 The Domestic demand requires to be increased, to give impetus to the economic growth in manufacturing sector as there is buoyancy to service sector in the current scenario.
Industries such as Textiles, Leather need cost effective resources support. While R & D , qualifies for the exemption , the skill development for the employees too should be qualified for exemption as well . Eligibility criteria of Textile Modernization Fund need to be relooked into.
Infrastructure growth has to be accelerated, in Tamilnadu for the Metro Rail Project, Ennore Port etc.
2. Direct Taxes
Income from salaries
2.1 A Simplified tax structure is requested. All Surcharges to be removed.
2.2 Proviso to section 17(2)(iii) and FBT on ESOPs It may be clarified that ESOPs would not be taxable as perquisite in all cases.
2.3 . Clause (v) of proviso to section 17(2)(vi) of the Income-tax Act, 1961 In view of increased cost of medical facilities the exemption limit needs to be increased suitably.
2.4 Profits and gains of business or profession
Depreciation – Section 32
Keeping in view the huge investments planned, it is essential that the rates of depreciation are revised back to 25% from the existing depreciation rates. This will help in financing the part of the cost of the project and also strengthen internal generation out of earnings in the initial years.
10. Depreciation – Air pollution equipments:
As the capital investment in new technology and equipments for controlling damage to environment is increasing, a reduction in depreciation rate would prevent the corporates from embracing new and more effective technology. Hence, the depreciation allowance of 100% for these selected equipments may be reinstated.
2.5 Investment allowance
The investment allowance may be re-introduced as an incentive so as to facilitate faster growth and also partly to meet increased costs of replacements.
2.6 Section 35D
The expenses on raising any form of capital may be allowed over a reasonable time period, say 3 to 5 years, even in cases not covered by section 35D. Alternatively, section 35D may be amended to allow deduction of expenses on raising additional capital in all cases and ceiling be limited to a fixed percentage of total resources raised.
2.7. Cost of collection
The advent of technology should certainly be innovative to curb the cost of collection of tax, which is 40 % .
2.8 Section 80C
Section 80C may be amended to increase the limit of deduction available from Rs.1 lakh to Rs.2 lakhs with a condition that an amount of Rs.1 lakh should be invested in shares other terms of instruments of any type of entities engaged in infrastructure sector.
2.9 MAT
Deduction of depreciation or loss
The explanation that depreciation does not include loss should be deleted
and brought forward loss as per books should be allowed to be deducted.
2.10. Section 44AB / 115JB
It may be clarified that provisions relating to
(i) tax audit report under section 44AB;
(ii) MAT under section 115JB;
(iii) Transfer Pricing
shall apply only to the payer and not to the recipient of presumptive income under section 115A/DTAs except that they shall be subject to such provisions where the assessee is taxable on net-basis.
3. Indirect Tax ( VAT – Service tax, Cenvat )
3.1. It may be clarified that if on a transaction, service tax is levied, the same should not be subject to levy of VAT and vice-versa.
3.2. Service tax threshold limit to be increased substantially. Up to Rs
15 lakhs.
3.3 Submission of NIL return to be removed.
3.4 CENVAT input credit to be made available for all .
3.5 Taxable Category : Club or Association
It may be clearly provided in the law that Chambers of Commerce, Trade and Industry associations are not liable to pay service tax on Subscription amount, membership fees and all other services of general nature (other than commercial activities or letting out of premises).
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Mr Srinivasan K Swamy is the Chairman of the Rs.700 Crores R K SWAMY HANSA Group, a leading Marketing Services Player in India. The Group Companies include R K SWAMY BBDO, HansaVision, Hansa Research, Customer Equity Solutions, iVista Digital Solutions, Hansa Estates and Hansa Zone in India and HANSA|GCR and HANSA Marketing Services in the USA. The Group employs close to 1000 people.
Professional Bodies:
Mr Swamy served as the President of Advertising Agencies Association of India for three consecutive terms. He is currently the Vice Chairman of Confederation of Asian Advertising Agency Associations. He is also a Governing Council member of the Advertising Standards Council of India.
Mr Swamy is a Past President of Madras Management Association. He currently serves as President of Madras Chamber of Commerce & Industry and President of All India Management Association.
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