PHD Chamber of Commerce and Industry has urged the Union Finance Minister to restrict corporate tax at 25% with cesses and surcharges and increase the rebate on interest paid on housing loan by 1.5 lakh from fiscal 2017-18 with a special provision in the forthcoming Budget through which lending to MSMEs by NBFCs could be brought in priority sector.
Submitting the Budget proposals of the PHD Chamber to the Union Finance Minister, Mr. Arun Jaitley, its President, Mr. Gopal Jiwarajka demanded that corporate tax rate should not be more than 25% from the headline rate of 30% and 34.6% with cesses and surcharges.
While appreciating the incentives given on promoting cash less transaction, Mr. Jiwarajka suggested more digitilazation of transaction such as RTGS and NEFT should also be free of transaction costs. As GST is going to become reality soon, we suggest that peak rate should be moderated to be level of 20%. The show cause notice should also be retained at 18 months instead of 36 months. Anti profiteering clause should also be removed from GST, said Mr. Jiwarajka.
The Chamber also argued that time has come to increase the rebate on interest paid on housing loan from the current level of Rs.2 lakh to Rs.3.5 lakh as it would boost demand in the real estate and construction as also spur up economic sentiments with positive multipliers. It also emphasized the need for Stressed Assets Fund to be opened through escrow accounts to complete all pending housing projects so that commitments made to buyers are fulfilled.
Mr. Gopal Jiwarajka appraised the Finance Minister that MSMEs which are the backbone of Indian economy with their massive contribution into it should be accorded with a facility as per which their borrowings from NBFCs could be treated under the window of priority sector lending. A Budgetary provision to this effect would be of great necessity as most of the businesses in this segment are credit starved.
Referring to GST, the Chamber’s President exuded confidence that with it becoming reality by July 2017, the indirect taxation would be rationalized to a large extent but urged the government that its peak rate should be moderated to the level of 20%.
The Chamber has also demanded that banks should also be allowed to provide funding for domestic mergers and acquisitions and effective transmission of the monetary policy is required so that the benefits of rate cuts are percolated towards beneficiaries.
Mr. Jiwarajka and his team complimented the Union Finance Minister, widely appreciating the demonetization decision of the NDA government, describing it as the most revolutionary economic reform which will turn around the economy and move it to less cash transactions.
Sr. Vice President, Mr. Anil Khaitan and Vice President, Mr. Rajeev Talwar including immediate former President Dr. Mahesh Gupta of the Chamber accompanied Mr. Jiwarajka while the budget proposals of the Chamber were submitted to Mr. Jaitley.