Budget needs to focus on promoting infra investment: CII
"Given that the 12th Plan envisages an investment of USD 970 billion in infrastructure, nearly half of which is to come from the private sector, urgent measures are required to make the sector viable and capable of attracting capital," CII
said in its Pre-Budget Memorandum submitted to the Finance Ministry.
Among the key measures suggested to provide a fillip to investment in the sector, CII has asked for exempting infrastructure companies from the payment of Minimum
Alternative Tax (MAT).
Currently, infrastructure projects are entitled for a tax holiday under section 80IA for 10 consecutive years during the first 15/20 years of their operation. "The levy of Minimum Alternative Tax (MAT) during this period has greatly negated the tax benefit offered under 80IA," said CII.
The memorandum has also drawn attention to the need for continuation of tax benefit for power sector under section 80IA sunset clause, which entitles a company for tax benefits, only if it starts generating power by the end of current fiscal year.
"With a view to attract large investment in power generation, which is critical for growth, CII has made a case for extending the sunset clause under Section 80IA till the end of the 12th five year plan period," CII said.
In order to reduce the construction and operation cost of projects, it said, it is in favour of restoration of section 10(23G).
By exempting the interest income
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