CII has suggested the government to bring about clarity in the taxation laws, simplification of procedures, and reduction of litigation in the upcoming Union Budget.
It noted that taxation laws should facilitate business transitions and make doing business easier for the industry.
In a statement, the industry body noted that Section 80JJAA provides for a deduction of 30 percent on emoluments paid to new employees, which can be claimed for three years. This is available up to emolument of Rs 25,000 per month.
Stressing the need to give a boost to employment at higher levels, CII has suggested raising the cap to Rs 50,000 per month to encourage employment in higher-skilled jobs as well.
It further said over the last few years, in order to enhance the financial strength of banks, and for the stability of the financial sector, RBI has mandated that banks should augment their NPA provisioning. CII has suggested that the limit prescribed under section 36(1)(viia)(a) for provision for bad and doubtful debts for the Indian banks should be increased from the existing limit of 8.5 percent to 15 percent.
It told the Finance Ministry that banks operating in India facilitate foreign investment by Foreign Portfolio Investments (FPI) by acting as custodians (cash and securities) for the FPIs investing in India.
“Specific clarification should be provided so that banking and broking service providers are not held as representative assessees of their clients,” it said.
Over the years, RBI has lowered the limit for recognizing an account as NPA from six months to 90 days. According to CII’s budget recommendations, Rule 6EA should be amended to provide that in case of banks, the interest on NPA which has become overdue for more than 90 days should be excluded from the total income and be taxed only on a receipt basis.
CII has suggested the laying down of general principles to guide the import tariff structure along with a roadmap to encourage and calibrate domestic manufacturing in alignment with global trade trends. It said that such a move would strengthen India’s manufacturing capacities and boost its export competitiveness as per shifting global value chains in the next three to five years.
It has also suggested a graded roadmap towards competitive import tariffs over the next three years, with lowest or 0-2.5 percent for inputs or raw materials, the highest slab of 5-7.5 percent for final products, and 2.5 to 5 percent for intermediates. This will help the Indian industry integrate into the global value chain while becoming competitive with its goods and services in the world markets.
As per the industry body these initiatives would go a long way in bringing growth back to the economy and moving one step ahead towards a taxpayer-friendly regime.