November 13, 2019
PHD Chamber delegation met Mrs Nirmala Sitharaman, Hon’ble Finance Minister to discuss vital growth provoking measures
A delegation led by Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry discussed the vital growth provoking measures including a dedicated fund for MSMEs, reduction in Tax on MSME firms working as Proprietorship/Partnerships, release of funds by the Government to BSNL and MTNL, Replacement of Advance Authorization License, reduction in DDT rates, carry forward benefit of MAT Credit for companies opting for lower new corporate tax rate of 22%, reduction in Long term Capital Gains Tax on shares, exemption from tax on foreign dividends and Rupee Trade with Venezuela.
The meeting with the Hon’ble Finance Minister was very productive and we look forward to revival of economic growth trajectory very soon, said Dr D K Aggarwal, President, PHD Chamber of Commerce and Industry.
We have suggested setting up of a dedicated fund of Rs 25,000 crore with no collateral being asked for the MSMEs on the lines of fund for stalled housing projects as the MSMEs are the major demand and employment creating sector of the Indian economy, said Dr D K Aggarwal.
We believe that the sector should be facilitated for fund raising through IPOs in SME exchange. In this regard, 25% of the CSR money be allowed to be invested in IPOs of MSMEs by the investors and it may be made compulsory that the amount so invested will be ultimately used for CSR use only, added Dr Aggarwal.
Many of the MSMEs do not fit in the corporate category and hence they are not able to avail the lower tax benefits. Thus we have suggested the Hon’ble Finance Minister for bringing down the maximum tax slab by minimum 5%, he said.
We have urged the Finance Minister for immediate release of funds by the government to BSNL and MTNL as they owe more than Rs 20,000 crores to their MSME and other vendors, said Dr D K Aggarwal.
Replacement of Advance Authorization License was also suggested during the meeting with a very simple and effective way to implement a procedure which allows for zero duty import of inputs for manufacturing of Information Technology Agreement products which already exists in the system, he said.
On the taxation front, it was suggested that the DDT rate should be reduced and triple tax on dividend should be removed, said Dr Aggarwal.
We have suggested that the carry forward benefit of MAT credit should continue for companies opting for lower new corporate tax rate of 22%, added Dr Aggarwal.
We believe that the long term Capital Gains Tax on shares should be 10% for the holding period after 1 year, 5% after 2 years and 0% after 3 years, said Dr D K Aggarwal. It was also requested to allow 88 E benefit to those who are showing their income from share trading as business income.
In the meeting, we also suggested that the profits earned in Foreign Exchange and dividends received from foreign subsidiaries may be made non-taxable. This would be highly beneficial for the Indian companies investing in foreign subsidiaries, thereby encouraging repatriation of profits from foreign operations, he added.
It was suggested during the meeting that Venezuelan companies may be allowed to open Rupee Accounts in specially designated bank branches in India which can be utilized for securing payments of Indian exports to Venezuela on barter basis, said Dr Aggarwal.
The Hon’ble Finance Minister was very receptive to our suggestions and appreciated the Chamber for its activities for the growth of trade and commerce in the country, said Dr D K Aggarwal.
PHD Chamber of Commerce and Industry