Budget 2014: India Inc Seeks Conducive Tax Environment, Bold Reforms

India Inc in its first meeting with Finance Minister Arun Jaitley on Friday pitched for a conducive tax environment and a bold statement of economic reforms in the forthcoming Budget with a view to revive investor sentiment and promote growth.

Participating in the customary pre-budget meeting, captains of Indian industry wanted Mr Jaitley to address the vexed issued of retrospective tax amendment carried out by the UPA saying that it has adversely impacted the investments.

Seeking a plethora of tax concessions to revive industry, India Inc urged the government to expedite the roll-out of Goods and Services Tax (GST) and implement the Direct Taxes Code (DTC).

"Government should make earnest efforts to move away from the aggressive revenue approach and provide a genuine non-adversarial and conducive tax environment," Ficci president Sidharth Birla said.

Talking to reporters after the meeting which lasted for over two hours, Mr Jaitley said, "It was a constructive meeting with India Inc. They presented their wishlist."

CII president Ajay Shiram in his presentation pressed for an amendment of the Income Tax Act which would promulgate the reversal of retrospective amendment and make all taxation prospective.

"A simple, transparent and non-adversarial tax regime bereft of complexities and ambiguities would go a long way to strengthen business sentiment and restore faith of the foreign investor in the India growth story," Mr Shiram said.

Among others the meeting was attended by Assocham president Rana Kapoor, PHD president Sharad Jaipuria, Bharti Enterprises chairman Sunil Mittal, Biocon chief Kiran Mazumdar-Shaw, Essar Group chairman Shashi Ruia, Suzlon Group chairman Tulsi Tanti and Videocon Group chief V N Dhoot.

While pitching for service tax exemption for exports, FIEO president Rafeeque Ahmed said the Finance Minister has indicated that there will not be any populist measures in the budget.

"Industry pitched for reviving the investment sentiment, making tax regime much more simple to understand, take away ambiguities," Bharti Enterprises chairman Sunil Mittal said.

On telecom sector, he said there is need to give boost to the sector and also auctioning of more spectrum.

According to Assocham's Mr Kapoor, a healthy fiscal situation can significantly reinforce the growth momentum provided by other structural reforms.

"High on the government's priorities should be to adhere to the path of fiscal consolidation while not compromising on the quality of adjustment. It is critical to signal control over policymaking with the objective of improving the growth-inflation balance in the economy," he said.

"We covered manufacturing as a thrust sector, innovation, entrepreneurship, job creation. Basically the government is very committed to kick-start the economy and other issues discussed were pertaining to service tax and exemptions," Biocon chairperson Kiran Mazumdar-Shaw said.

Industry also demanded income tax exemption limit to be raised to raise to Rs 5 lakh from existing Rs 2 lakh and deferment of GAAR for at least next three year and exempting dividend from MAT.

"We spoke about exemption in income tax to people who are having Rs 5 lakh income annually. They should be exempted from IT because with Rs 5 lakh, nothing happens in a city like Delhi," Videocon Group chairman Venugopal Dhoot said.

Gems and Jewellery Export Promotion Council chairman Vipul Shah asked the Finance Minister to scrap import curb on gold.

Renewal energy needs priority attention and the industry has sought FDI exemption in renewal energy projects, Suzlon Group chairman Tulsi Tanti said.

Meanwhile, Finance Ministry sources said the mood was optimistic. Most of the corporates demanded tax related concession.