'Cut duties to curb inflation'

NAGPUR: With union budget round the corner, businessmen from the city wary about inflation expect Pranab Mukherjee to at least keep the excise duty rates unchanged if not cut them. They expressed concern over rising prices and demanded a cut in income tax rates too. Although an increase in direct taxes is also theoretically considered as one of the measures to curb inflation.
Industrialists claim economy has not revived fully and the stimulus should continue.The current peak rate of 10% excise duty should be maintained. President of Vidarbha Industries Association (VIA) Pravin Tapadia said apart from keeping the duty rates unchanged, government should also cut rates for minimum alternate tax (MAT) applicable for corporate registering book profits. The current rates of 20% are too taxing especially for entities facing financial crisis but still having book profits.
Tapadia also wanted a policy announcement on allowing foreign direct investment in SEZs, albeit with a domestic ally. "The deadline for units in SEZs to start operations so as to avail direct tax benefits should be extended to March 2018 from the present March 2014 at present. This is because still many SEZs including Mihan are yet to take off," he added.
Padmesh Gupta, an industrialist from the region having stakes in coal sector, said government should do away with 5% customs duty on crude oil as prices have already crossed $100 a barrel mark. This would provide relief to the consumers reeling under high petroleum prices. The government should also incentivize use of fly ash that would help reduce pollution. Distribution of water on public private partnership model should also be encouraged, he added.
The traders on the other hand want a decision on goods and service tax which would bring a single indirect levy throughout the country. Dipen Shah, secretary of Nag Vidarbha Chamber of Commerce (NVCC), said if the BJP-ruled states were not willing to adopt GST, union government should impose it through a law. However, former president of this guild B C Bhartia, said since GST would be levied at every stage of value addition it would increase the tax burden making goods and services more expensive.
Vice-President of Institute of Chartered Accountants of India (ICAI) Jaideep Shah said even as the country was back on growth track, fiscal measures should be taken to control inflation. However, income tax rates should be lowered as that would increase compliance. Measures should also be taken to reduce tax-related litigation between the department and taxpayers.