Industry seeks tax cuts

Chennai:

Tax cuts, increased infrastructure spending in urban areas and concessional excise duties for small cars are some of the expectations of the city-based traders, auto manufacturers and real estate developers from Union budget. 

The real estate sector in the city feels the Union budget should focus on increased infrastructure spending in the urban areas in order to unlock the value of neglected and hidden land assets in these areas.

T Chitty Babu, chief executive officer of Akshaya Pvt, Ltd said this would enable more holistic growth for the real estate markets in our over-burdened metros and allow the demand for housing to spread over a larger canvas.

He also said that more tax benefits on housing loans would benefit the sector.  

He also said that the budget should reduce high cost of borrowing. “Currently interest rates charged by the banks to developers and home buyers are high and need to be brought down. A reduction in the base rate is necessary to help banks lower their lending rates,” he added.

He also said the budget must consider the fact that the Indian real estate sector generates countless jobs across its various verticals. “By granting it industry status, the government would enable the sector to access debt lending at better interest rates and reduced collateral values,” he added.   

 He said the budget should make provisions for subsidized construction materials for low-to-mid-income housing, and rationalized license fees and other government levies.

 “One of the key concerns the real estate sector has been facing is the inordinate delay in sanction of approvals. Provision of single-window clearance for real estate development projects is the need of the hour,” he added.

R Sethuraman, director-finance and corporate affairs, Hyundai Motor India Ltd said that the government should provide concessional excise duty structure to small cars. He said the excise duty on small cars needs to be reduced to 10 per cent besides reduction in duty structure for big cars to 24 per cent against the current rate of 29 per cent.

He also said that the government has recently announced an increase of diesel price by 50 paise per month to bring down the price difference between petrol and diesel. “Some talks are going on to impose specific duty on diesel cars. This will be double whammy for the consumers and will affect the passenger car industry badly. Diesel cars now come with most advanced technologies and are fuel efficient & environment friendly. The consumption of diesel by passenger cars is miniscule (just one per cent of the total consumption). Hence, in the interest of the industry, the government should not impose additional duty on diesel cars,” he added.

Tamil Nadu Vanikar Sangankalin Peramaippu president A M Vikkramraja said he wanted the tax free income to be raised from rs two lakh to Rs five lakh. He also demanded the service tax which is now 12.8 per cent be reduced to five per cent. He also said that the taxes on essential commodities should be abolished. He also called for a single point tax instead of value added tax which is levied at multiple points. He also opposed the implementation of Goods and Service Tax.