It has also demanded removal of education cess on income tax on corporate and non-corporate assesses and also recommended withdrawal of investment allowance on plant and machinery.
In a detailed presentation made to the Finance Ministry by PHD Chamber, its President Mr. Sharad Jaipuria emphasised that the current aggregate corporate tax rate burden on India Inc. @ 32.445% is too high to bear and thus drastically needs to be curtailed at 25%. This should be inclusive of surcharge, cess and other levies.
In a statement issued here, Mr. Jaipuria urged the Finance Ministry that the rate of MAT has been hiked to 18.50% in the last few years from its earlier limit of 7.50%. The increased slab of MAT has hit companies' outflows and therefore, it is suggested that MAT should be brought down to 10% before it is abolished gradually in the next few years.
In addition to reduction of corporate tax and MAT, the PHD Chamber also demanded that the surcharge and education cess on income tax on corporate and non-corporate assesses need to be removed since surcharge as well as education cess were levied on temporary basis.
About investment allowance, the President of the Chamber pointed out that the Finance Act 2013, introduced investment allowance @15% on plant and machinery acquired and installed exceeding Rs.100 crore between April 2013 and March 2015 in the manufacturing sector.
The Chamber is of the view that the restricted condition on 100% depreciation items should be withdrawn so that investments are also encouraged in priority areas of the economy.
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The limit of Rs.100 crore should be reduced to Rs.10 crore to enable the small and medium enterprises avail the benefit of investment allowance, concluded Mr. Jaipuria.
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