Group taxation regime for infrastructure

Tax consolidation for special purpose vehicles is desirable

In a move that could redefine the landscape of infrastructure development in India, the government would do well to consider introducing a group taxation regime for the sector under the Income Tax Act, 1961. This format is already embraced by many of the world’s economic powerhouses.

A company that produces biscuits, shoes and steel pipes can run each of these businesses as stand-alone divisions of the parent company; and from a taxation point of view, consolidate their profits and losses to arrive at a single assessable taxable value. Now consider an infrastructure player. Any medium-sized player will