“With pressure mounting on Finance Minister to mobilise necessary resources to allocate more funds on social and agricultural sectors, industry’s demand for reduction in corporate tax may not be met,” official sources said.
However, the budget is likely to take “some other fiscal measures” to boost the investment sentiment of Indian Inc, they added.
The Tax Research Cell (TRC) of Budget Division, which provides vital input for any tax proposals, is understood to have recommended “status quo” approach on corporate tax matter. Majority of nearly 300 Chief Executive Officers (CEOs) polled by Assocham feel that the forthcoming parliamentary and assembly elections would have no influence on the Finance Minister to inspire him for fiscal concessions towards Indian Inc.
Apart from reduction in corporate tax, the industry has pleaded for abolition of dividend distribution tax and minimum alternative tax and tax incentives for ‘sunrise industries’.
On indirect taxes front, Ficci has called for reduction in excise duty rate from 16 per cent to 14 per cent in 2008-09 and later to 12 per cent and alignment of customs tariff with calibrated internal reforms.
