The Indian Chamber of Commerce has asked the Centre to set up a commission to review the Income Tax Act 1961 in its entirety and simplify its provisions.
“This is an old Act. Every year in the Budget, amendments are made which has made this Act complex to understand. These amendments have resulted in many anomalies which in turn have given rise to a large number of legal cases,” the chamber has said.
The chamber proposed a customs duty revamp in strategic sectors such as steel, solar, aluminium and lithium-ion batteries to invigorate domestic manufacturing.
Finance minister Nirmala Sitharaman is slated to present the annual budget
on July 23.
ICC President Ameya Prabhu pressed for a “comprehensive rationalization” of customs duties, asserting it has immense potential to propel India into a global manufacturing leader.
He underscored how current levies on raw materials unfairly burden domestic players, especially downstream businesses.
Prabhu advocated for rectifying the inverted duty structure by lowering the tax on liquefied petroleum gas (LPG) to 2.5 per cent from 5 per cent.
“To bolster domestic manufacturing, we necessitate raising duties on polymers such as PVC, PET, PP, and polyesters to 10 per cent,” he said, emphasising a drive for self-sufficiency in the petrochemical sector.
Talking about the importance of the aluminium foil sector, the president said the domestic industry has been facing severe losses as there is an anti-dumping duty on raw materials whereas the finished goods are not subject to any duties on imports from China.
PwC view
Tax consultancy firm PWC has urged finance minister Nirmala Sitharaman to extend the beneficial tax regime for new manufacturing companies, reports PTI.
In 2019, the government introduced a 15 per cent rate for new manufacturing companies, which lapsed on March 31, 2024.
“I think that is one extension, which is being expected, and the expectation is also that instead of giving a year-on-year extension if we can look at the block period, say for the next five years,” said Sandeep Puri, partner, Price Waterhouse & Co LLP.
“Shifting a manufacturing is a big decision and the corporates may take time before making a decision and make it viable, feasible and that’s the first bit.”
