It is suggested that an appropriate procedure/form etc. should be introduced for exempting goods from levy of CST, which is to be used in manufacture of products to be exported.
IV. DIRECT TAXES
Benefit of Weighted Tax Deduction for R&D expenditure under section 35(2 AB) of Income Tax Act should be extended to the entire year for 2004-05.
The benefit of Weighted Tax Deduction for R&D expenditure under section 35(2 AB) of Income Tax Act should be extended to Research & Development expenditure incurred externally also.
The withholding tax u/s 194I @ 22.44% should be abolished since a significant component withheld is the capital recovery which is not correct as it is not income.
Income Tax: A deduction similar to Housing loan should be granted for the car loans as this will lead to a growth in the passenger car segment and will generate higher revenue to the government in terms of Excise duty and sales tax.
V. DEPRECIATION RATE
Depreciation Rate on Plant & Machinery to be increased from 15% to 25%.
Motor Vehicle Depreciation to be raised from 15% to 25%.
VI. OTHER ISSUES
Reasonable Lead time to be given for introduction of proposed changes in Budget. Any new levy and mechanism should be notified early.
Wealth tax should be abolished.
Either the tax should be kept at a totalled single rate or the imposition/change in any tax structure should be done in consultation with representatives of the software industry like SAP, Oracle, etc.
Extension of advance ruling facility for large tax payer units under LTU jurisdiction or companies paying more than Rs 5 crore taxes.
Kancheepuram District should be declared as an Industrial Cluster for automobiles.
Steps are needed to encourage investment. The Automobile industry should be brought under purview of existing incentive structure.
