New Delhi [India], June 13 : The Confederation of Indian Industry (CII) has asked for tax reforms in India to sustain the growth momentum of the Indian economy.
In a press meet, the newly elected President of the Industry body CII, Sanjiv Puri highlighted the need for tax reforms in the country.
One of the primary areas of focus for CII is the rationalization of capital gains tax. CII suggested that bringing about consistency in tax rates and holding periods for different types of instruments would streamline the tax system and encourage investment.
On a question on capital gains tax rationalisation CII President says "he is hopeful that the government will amend the tax structure in the upcoming budget"
Additionally, CII also asked for a simplified Goods and Services Tax (GST) structure, advocating for a three-rate GST system with moderated rates. Currently, the GST has a 5-tier tax structure consisting of tax slabs at nil, 5 per cent, 12 per cent, 18 per cent, and 28 per cent, with certain goods and services attracting a cess over and above the applicable tax rate.
In the context of customs duties, CII emphasized the need to exclude exports from the duty structure and move towards a streamlined, three-tiered import duty framework. This approach is expected to make Indian exports more competitive on the global stage.
Furthermore, CII also asked for rationalizing direct taxes. Tax Deducted at Source (TDS) should be rationalised by reducing the number of rates and implementing a small negative list, which would simplify tax compliance for businesses.
CII also asked for bringing significant changes to the GST regime, including inclusion of petroleum products, electricity, and real estate under GST. Currently, petroleum products, alcohol, and tobacco are outside the ambit of GST, which creates complexity and limits the efficiency of the tax system. Bringing these sectors under GST would create a more unified and efficient tax structure.
On other reforms CII added that while much has been done to improve the ease of doing business in India, more efforts are required. This includes improving dispute resolution mechanisms by working on alternate dispute resolution systems to ensure faster and more efficient resolution of commercial disputes.
In the employment sector, CII said that labour reforms are critical and called for the implementation of new labour codes to modernize and simplify labour laws. Additionally, for land reforms, CII suggested that states should reduce stamp duty to facilitate easier and more cost-effective property transactions
CII also added that the intensity of formal skilling in India is much lower than required. It stressed on the need to align skilling initiatives with industry demand to better prepare the workforce for current and future economic needs.
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