and Industry, Coimbatore
Press Release
July 6, 2009: Union Budget 2009
The Indian Chamber of Commerce and Industry, Coimbatore welcomes the growth oriented Budget 2009-10 presented by Shri Pranab Mukherjee, Hon’ble Union Finance Minister. Our Chamber welcomes the following features, incorporated in the budget:
a) Abolition of ‘economically unviable’ Fringe Benefit Tax (FBT).
b) Announcement that Goods and Service Tax (GST) will be introduced from 1-4-2010. The Government has to clarify many issues relating to dual GST: Central GST and State GST.
c) Announcement that new Direct Tax Code will be introduced within another 45 days to facilitate introduction of GST.
d) Announcement regarding reduction of Customs Duty on Cotton Waste from 15% to 10%.
e) Announcement that a National Web Portal will be established so that job seekers can register online from any where and approach any employment exchange for jobs. This will lead to reduction in number of people unemployed.
f) Announcement for establishment of Handloom Cluster in Tamil Nadu.
g) Announcement that income tax form Saral will be simplified and new form will be introduced.
h) Announcement on increased allocation of 87% to JNNURM - Rs.12,887 crores.
i) Hon’ble Finance Minister’s announcement that allocation to National Highways Authority and National Highways Development Programme to 23% is disappointing. However, the announcement that IIFCL, will evolve a takeout financing scheme in consultation with banks to facilitate incremental lending to infrastructure sector is a welcome one. This will make available more funds with PS Banks which may be made available to Industry.
j) The announcement that businesses to be incentivised by providing investment linked tax exemptions rather than profit linked exemptions is a welcome one. However, the scope of this programme is now limited only to ‘cold-storage warehouses and natural gas or crude or petroleum oil pipeline network companies’. This should be extended to all the sectors.
k) We welcome the exemption of Service Tax on goods transported by rail.
Our Chamber, however, appeals to the Finance Minister to reconsider the following:
a) Minimum Alternate Tax (MAT) increase from 10% to 15%.
b) We appealed to the Government to increase the personal income tax exemption limit at least to Rs. 3 lakhs for all categories and Rs.4 lakhs to senior citizens. However, this has been increased only by Rs.10,000 from Rs.1.50 lakhs to Rs.1.60 lakhs everyone and Rs.15,000 for senior citizens from Rs.2.25 lakhs to Rs. 2.40 lakhs.
c) We had appealed to remove surcharge on Corporate Tax. The Government has removed surcharge only on individual tax. Government should reconsider removal of surcharge on Corporate Tax.
d) Chamber appeals to the Hon’ble Finance Minister to withdraw Presumptive Tax extended to all small businesses with a turnover upto Rs. 40 lakhs. MSME sector is reeling under severe recession and other problems of power cut, labour shortage etc. And hence this sector should not be burdened with presumptive tax.
e) Absence of any announcement in the Direct Tax related to Limited Liability Partnership (LLP).
f) The Government has again failed to withdraw and chosen to continue to the Dividend Distribution Tax, which is disappointing.
g) The industry was expecting reduction on Service Tax rate to 8%. This has not come. The Government should reconsider this.
h) There is no specific stimulus package for Textiles Spinning Industry which is reeling under severe recession. This Industry needs special attention from the Government and hope the Finance Minister considers this when the debate on budget is taken up.
There are several announcements like permitting ‘non-promoters, public shareholders in all listed companies’. ‘Disinvestment of public sector units except banks and insurance companies’. Announcement of Unique Identification Number (UIDAI Programme) and higher allocation of all social welfare programmes which are all welcome.
Mahendra Ramdas
President