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De-criminalize GST law, cut personal income tax rate in Budget: CII for government


NEW DELHI: Industry Authority CII proposed reducing the personal income tax rate, decriminalizing the goods and services tax and reconsidering the capital gains tax rate as part of the agenda presented to the government for the upcoming Budget.
Arguing that the GST law already contains sufficient penalty provisions to prevent tax evasion, the CII proposed to legalize the GST law.
In addition, the applicability of prosecution provisions should not be based on the absolute amount of tax evasion but should be based on the actual intent to evade and a certain percentage of the tax payable.
“A new look at capital gains tax in relation to tax rates and holding periods is needed to remove complexity and inconsistencies. Furthermore, the government should envisage a reduction in personal income tax rates in the future. push for the next reform as this will increase disposable income and restore the demand cycle,” said CII president Sanjiv Bajaj speak.
The chamber said tax certainty for businesses should continue and corporate tax rates should remain at current levels, adding that arrests or detentions should not be in civil cases. unless criminalization in business has been proven beyond doubt.
Regarding fiscal consolidation, a key component to reviving growth, CII recommends that a reliable roadmap be developed and published in the budgeting process, which will gradually reduce the fiscal deficit. 6% GDP in 2024 and 4.5% in 2026.
To revive investment, the pre-budgetary memorandum submitted to the Ministry of Finance also recommends increasing investment spending to 3.3-3.4% of GDP in 2024 from the current 2.9%, with a target further increase to 3.8-3.9% by 2025.
It also proposes to increase spending on green infrastructure such as renewable energy along with traditional infrastructure, such as roads, railways, ports, etc. In addition, the full implementation of the Gati Shakti and NIP needs to be accelerated to make infrastructure creation efficient.
To finance infrastructure, the industry body has recommended deepening the market for corporate bonds (including infrastructure bonds), favoring a package for large municipal bonds and development. launched the Synthetic Financial Stars program for sustainable projects with an allocation of Rs 10,000 crore, among others.
“Private-sector investment also needs to be boosted as public investment alone is not enough to spur growth in the economy. Private sector participation in PPPs also needs to be revived through initiatives.” timely payments, prompt Dispute Resolution Mechanism, and expedited the land acquisition process,” CII said.
To enhance consumer demand, it has proposed introducing policies such as streamlining income tax rates and tables for individuals, reducing the GST rate by 28% on select durable goods and accelerate rural infrastructure projects to facilitate job creation in the hinterland.
In terms of revenue generation, CII emphasizes to meet the divestment target and to accelerate the privatization of PSU, which will increase revenue in addition to promoting economic efficiency, accountability and authority for the company. identified PSUs should be transferred to DIPAM from decision-making ministries to privatize a company.
To streamline spending, CII emphasizes the need to cut non-priority spending by streamlining subsidies, such as fuel and fertilizer. It is estimated that non-merit grants account for a staggering 5.7% of GDP, of which 1.6% is from the Center and 4.1% from the states. This is clearly unsustainable, it argued.
In terms of encouraging production and boosting exports, which are key to recovering growth, CII proposes a supportive measure to facilitate business operations through further digitization, faster customs clearance. and deadlines, contract enforcement, alternative dispute resolution mechanisms and a true single-window system that includes central and state clearance procedures.
It also proposes that the Credit Linked Capital Grant Scheme (CLCSS) to upgrade technology for MSMEs, should be reinvigorated and green finance should be provided to finance climate-friendly technology in MSMEs .
In addition, to provide export profitability, CII has proposed a classification route to move import tariffs to competitive levels and apply to all export products, including EOU and Special Economic Zone units, under the RoDTEP program.
The end date for starting production under Section 115BAB of the Income Tax Act should be extended to March 31, 2025 from the current March 31, 2024. This will encourage more investment in the manufacturing and export sectors, according to CII.

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