The US industry has urged FM to rationalize and simplify direct and indirect taxes in India.
A top US strategic and business advocacy group has urged Finance Minister Nirmala Sitharaman to simplify and rationalize India’s direct and indirect taxation system. The group believes that this move would increase the confidence of global investors and lead to greater foreign direct investment.
In its submission to the Finance Ministry ahead of the annual budget presentation, US-India Strategic and Partnership Forum (USISPF) has urged the ministry to rationalize corporate tax rates for foreign companies and harmonize holding periods and rates for different instruments for capital gain tax reforms.
It also urged the Finance Minister to extend the concessional tax regime to Foreign Portfolio Investment (FPI) from investing in securities while requesting her to reiterate India’s commitment towards the global tax deal.
The top recommendations of the US-based forum include advocating for a stable and predictable tax environment, improving the ease of doing business environment, rationalizing the cost of doing business, and rationalizing tax rates and tariffs. It has also sought tax incentives for specific sectors like renewable energy and R&D investment in the health sector.
On the topic of indirect taxes, USISPF has recommended reducing the customs duty rates for x-ray machines from 10 percent to 7.5 percent and provision of customs duty exemption on all items imported by specified research and development units while seeking clarification on the customs duty exemptions provided to oil and natural gas companies.
Additionally, USISPF urged the finance minister to reverse the increase in customs duty on nutritional products, recognizing the importance of the product and encouraging the availability of scientifically designed nutritional food in India.
In terms of customs tariffs and duties, the group advocated for addressing ambiguities in the customs tariff act on telecom products, extending concessional customs duty to advanced biofuel projects, and strengthening the process on the ground with regard to trade facilitation schemes such as CAROTAR and Faceless Assessment.
In an interview with CNBC-TV18, USISPF President Mukesh Aghi emphasized that India has the potential to target $100 Billion in FDI while stating that the upcoming budget has to be micro-focused on capex and infrastructure spending to fulfill this goal.
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