"The existing cumulative burden of domestic indirect taxes on Indian industry exceeds 35 per cent, as a result of which prices of manufactured goods go very high. This renders domestic industry non-competitive," an Assocham release said.
The 'distortions' in the indirect tax structure originate from multiple taxes like cenvat, sales tax, central sales tax and local levies such as octroi, it said in a communication to the Investment Commission chairman Ratan Tata and favoured an early introduction of VAT with the maximum indirect tax rate not exceeding 20 per cent.
The chamber also suggested immediate implementation of the Electricity Act and stressed the need for a regulator in hydrocarbon sector for attracting private investments in power and oil sectors.