New Delhi: The Indian industry has asked the Government to cut personal and corporate tax rates in the coming Budget and impose 35 per cent import duty on Chinese products to offset rupee's appreciation against the Yuan.
The industry placed these demands during the customary pre-budget consultations with the Finance Minister, saying the steps were necessary to spur consumption and investment level - key to sustaining economic expansion.
Although the industry wanted him to impose 35 per cent import duty on Chinese products, sources quoted Finance Minister P Chidambaram as saying that that rupee appreciation has not been much in terms of real effective exchange rate.
The Minister felt that though there were reports of a dip in exports due to rupee appreciation, tax collections did not corroborate this.
Sources said Chidambaram was of the view that industry and services sector need to sustain high growth rates, as four per cent growth in agriculture alone would not help achieve 9-10 per cent economic growth. For this, the industry sought greater tax concessions.
"The peak income tax rate should be reduced to 25 per cent from 30 per cent and should be levied on more than Rs 5 lakh. Corporate tax rate should be retained at 30 per cent but 10 per cent surcharge on it should be withdrawn,'' Assocham President Venugo pal N Dhoot told reporters.
He also wanted tax concessions for India Inc making acquisitions abroad. The pharma industry asked the finance minister to expand the scope of tax rebate to third party R&D activities instead of just in-house activities.
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