Extend Fiscal Stimulus and support Housing and Auto Sector :Pre Budget Meeting of PHD Chamber with Revenue Secretary

Extend the fiscal stimulus packages and support to housing and automobile sector are some of the suggestions which the PHD Chamber suggested during Pre-Budget consultation meeting with the Revenue Secretary today.

The government should continue to extend the fiscal stimulus package for some more time till our industrial recovery gains maturity suggested Mr. Ashok Kajaria, Senior Vice President, PHD Chamber. The government should continue to support housing and automobile sector which will help in sustaining the economic growth tempo besides creating employment, demand of industrial goods, generating tax revenue etc.  In view of the weak external demand despite signs of global recovery, the government should also take remedial measures to help increase exports.

Mr Kajaria observed that with the increasing prices of agriculture produce the cost of various goods has gone up leaving relatively less disposable income in the hands of the masses unless the availability of cash with the middle class is improved demand will not see an upswing trend. 

While discussing other issues relating to direct taxes, PHD Chamber suggested that cascading effect of the dividend distribution tax should be eliminating not just partially by granting the benefit only in case of horizontal structure of holding subsidiary but also in case of vertical structures wherein there will be more than one step down subsidiary.  In view of the rapid obsolescence, the lowered depreciation is not adequate to meet the requirement of the replacement of the asset.  Depreciation on machinery should be allowed at least at the rate of 25 per cent to provide assesses with sufficient plough back of funds.  It was also suggested that benefits to housing projects under section 80 1B of the income-tax Act should be extended till 2015.  Provisions concerning conversion of companies and partnership firms in to LLP should not be treated as transfer and provide for pass through of various tax benefits to the converted entities.

While appreciating the reforms in indirect taxes, Mr Kajaria also suggested that anomalies of inverted duty structure should be corrected.

.