SUPPORT GAAR IMPLEMENTATION AS SCHEDULED, REVENUE SECRETARY URGES INDIAN INDUSTRY AT PHD CHAMBER

Revenue Secretary, Dr. Hasmukh Adhia on Thursday appealed to the indigenous industry to support the government in its attempt to implement GAAR by 2017 and added stating that the Minimum Alternate Tax (MAT) rates’ cannot be brought down at this juncture as the government has already kept a sufficient space for corporates to enjoy sufficient tax exemptions in other forms.

“GAAR implementation by the government ought to happen as scheduled as foreign institutional investors and such other portfolios have been escaping capital gains in one form or the other, keeping the domestic industry at disadvantages and, therefore, it should come out openly in support of the government to implement it as scheduled”, said Dr. Adhia.

Delivering his address at a Post Budget Interactive Session – Implications of Union Budget 2016 under aegis of PHD Chamber of Commerce and Industry here today, Dr. Adhia sought the support of Indian industry to let the government put in place GAAR implementation by 2017 as the move is in its interest.

Referring to the issue of MAT, the Revenue Secretary held that its existing rates cannot be curtailed as industry is being provided with so many exemptions in other forms and the government has already done the balancing exercise in a planned and meticulous manner and, therefore, seeking to reduce the MAT ceiling would not be opportune at this juncture.

On the issue of corporate tax reduction as promised by the Union Finance Minister while presenting the Budget proposals of last fiscal, Dr. Adhia clarified that if the finance ministry curtailed general corporate tax by one per cent in budget proposals for 2016-17, it would mean a revenue loss of Rs.15,000 crore which the government at this juncture could not afford due to prevailing adverse global conditions on account of which our exports have consistently suffered in the last couple of months. 

However, the government has extended this benefit for new manufacturing units to avail of corporate tax facility at the rate of 25% from 2016-17, he pointed out adding that the budget for 2016-17 has been exclusively designed to generate domestic demand with large allocations for spending in rural economy, especially in its agricultural, irrigation, power and infrastructure sector since global economic landscape is not yet favourable to absorb exports from developing nation such as India.

In his welcome remarks, President, PHD Chamber, Dr. Mahesh Gupta reiterated the demand of the Chamber to reconsider the dividend distribution tax that has been brought in the budget of fiscal 2016-17 though the Revenue Secretary stayed put non-committal on this issue.

Among others who participated in the Session comprised Sr. Vice President, PHD Chamber Mr. Gopal Jiwarajka, its Chairmen, Direct and Indirect Taxes Committees, Mr. Anil K Chopra and Mr. Bimal Jain, lauding that the budget proposals would fuel domestic demands but some of its provisions on direct and indirect tax front need to be reset to cater to emerging needs of Indian industry. 

The Secretary General, PHD Chamber, Mr. Saurabh Sanyal moderated the session.