Industry chamber Assocham today sought reduction in corporate tax rate to 25 per cent, cut in individual tax rates and an upward revision in the exemption limit to up to Rs 5 lakhs in the 2017-18 Budget.
In its pre-budget meeting with Revenue Secretary Hasmukh Adhia, Assocham demanded that since the proposed multiple Good Service Tax (GST) rate structure could increase classification disputes, therefore the categorisation of products under each duty slab should be carefully done.
Immediate reduction in the corporate tax to 25 per cent to attract more investment in the country, while for driving the consumption led demand should be brought about, Assocham said.
As part of exercise to bring down corporate tax rate in a phased manner from the existing 30 per cent to 25 per cent over a period of four years, government had in 2016-17 Budget lowered the corporate tax for new manufacturing units to 25 per cent with a view to promote industrial activity and generate jobs.
Currently exemption limit for individual tax payers stand at Rs 2.50 lakh, while for senior (60 years and above) and very senior (80 lakh and above) citizen the exemption limit stands at Rs 3 lakh and Rs 5 lakh.
“Income tax for individuals should also be reduced along with upward revision in the exemption limit up to Rs 5 lakhs,” it said.
Assocham said the committed investment link tax incentive for specified period should be grandfathered under GST for the un-expired period of committed incentives.
“During the initial period of two year after implementation of the GST penal provision should not be made applicable unless there are frauds cases,” it said.
The tax administrative provision under the draft GST law are quite harsh and may leave to Inspector Raj and this need to modify in the final GST law, it said.
Assocham also demanded that Inverted Duty structure under excise on pharmaceutical products needs to be corrected.
“Demonetisation of currency notes of Rs 500/1000 will have a short term adverse impact on demand on items for mass consumption hence duty rates for such products should be reduced in the next budget to revive the demand,” Assocham said.