In order to overcome the difficulty, Indian Industries Association (IIA) in its pre budget memorandum has proposed to the government to enhance the rate of depreciation on plant and machinery to 50 per cent from 15 per cent.
They have also asked to reduce the income tax for manufacturing enterprises to 20 per cent from present 30 per cent, as this would unlock some money in the hands of the entrepreneur to make capital investment.
They have also suggested that TDS amounts should be allowed to be adjusted in any of the Assessment Years up to 3 years following the year of issue of certificate so that it will provide convenience to assesses and will take care of genuine delays. TDS on Interest should be deducted only if interest payment exceeds Rs 25,000 p.a.
Commission and brokerage to be raised to Rs 50,000. Further the rate of deduction of TDS should be reduced to 5 per cent. Fess for professional or technical services should be raised to Rs 1 lakh per annum.
In advance tax the association has proposed that Interest U/S 234-B should be applicable only in case advance tax paid falls short of 60 per cent of the total tax payable on the returned income. Importantly if the gross total income of assesses is Rs 60 lakh and above audit is mandatory. They have recommended enhancing the limit to Rs 1
They have further recommended reducing general rate of Excise duty to 8 per cent to restore fiscal stimulus and to increase the exemption limit of excise duty to minimum of Rs 2 crore.
They want the rate of service tax to be moderated down to not exceeding 8 per cent instead of current rate of 10 per cent in line with the general rate of Excise duty. Insurance Premiums should be taken out from Service Tax net. Service tax payable under works contract category for compounding scheme should be brought down to 2 per cent from 4 per cent.
To push the inflation in to downward spiral and thus hastening the process of normalisation of overheated economy they have suggested that the rate of CST should be immediately brought down to 0 per cent. This will only justify the introduction of VAT for which the government promised never to charge any tax other than VAT. They also suggest an entire new solution for this in way of implementing GST as a single tax.
In order to improve the social security to MSME Entrepreneurs they have recommended the Central government to introduce the social security system for Micro and Small Scale entrepreneurs after the age of their retirement age. A suitable scheme may be devised by the Government to provide Social Security to Micro and Small Entrepreneurs.
