Budget on the 10th: What is your wish list?

With the Union Budget on the 10th of July, we will like to make a wish list of things that could benefit the auto industry. There are several things that will like to see. However, we speak to Mr. Farrokh Cooper, Chairman & Managing Director of Cooper Corporation. Pvt. Ltd to understand what a major automotive OEM expects from this budget. Cooper Corporation is one of the largest engine manufacturers in India. The following is what Mr Cooper had to share:

1. Expectation from the Union Budget for Manufacturing sector:

· Labour reforms are essential. Govt. should decentralise and de-bureaucratise decision making to the grass root level.

· It should simplify norms connected with sanctions.

· More Export incentives should be given to exporters which would provide boost to overall Manufacturing industry and help generate foreign exchange reserves of the country.

2. Reforms  in taxation and tax administration :  

Direct Taxes:

· Export oriented unit (EOU) should be once again encouraged and income tax exemption given for the same.

· Govt. should reform the working of the Income Tax Dept. to see that appeals before appellate authorities are disposed of within a year of filing, applications for refunds should be disposed of within  one year and disciplinary action being taken on errant officers.

· Assessing Officers should be made answerable for disallowing rightful/ reasonable claims and making arbitrary/ ad hoc additions to income.

· Investment in fixed assets should be encouraged by increasing depreciation limits and investment allowance.

· Withdrawal of MAT as it works as a disincentive for efficient companies.

· Double taxation of same income, once at Net profit level and again on distribution of the same by way of dividend should be avoided.

· TDS provisions should be rationalized and the deductor should not be penalized for technical lapses in complying with TDS provisions.

· Assessees should not be denied credit of tax deducted at source for mistakes of the tax deductor while uploading his TDS returns.

· Accelerated depreciation should be allowed on investment in non renewable energy sources like windmills, solar plants etc.

· It should also declare awards for performing industries not only in cities but the rural areas also.

Indirect Taxes :

· Stringent and burdensome provisions of Service tax especially relating to Reverse charge mechanism should be done away with.

· EOUs should be allowed to export goods on payment of duty and claim subsequent refund.

· Rates for duty drawbacks should be increased.

· SHIS licence entitlement scheme to be continued.

3. Power Sector Reforms :
        
· Consistent and transparent policy frame work for generation of power from renewable sources. (For example Solar) should be in place.

· Captive consumption of power interstate (i.e. Power generated in one state should be allowed to be consumed by the generator in his manufacturing plants located in other states).

· Reduction in cross subsidy in power cost.

4. Rationalisation of provisions of the Companies Act, 2013 :

· Provisions of the Companies Act, 2013 presently applicable to all private companies should be made applicable only to private companies above a certain threshold.

· Provisions relating to Cost Audit should be made applicable only to companies engaged in the business of manufacture of essential commodities where excess profiteering by companies may affect public at large.  All other companies should be exempted from Cost Audit since it results in confidential Cost data of companies into public domain thereby hampering secrecy of proprietary information relating to costs.

5. Tax concessions on individual taxation

· Income Tax slabs should be eased and  10% tax on super rich should be removed because this is a punishment for honest tax payers as Mr. Chidambaram has said that there are only 40,000 people in the whole of the country who have a declared income of more than 1 crore.  This figure is patently erroneous as the amount of money in the parallel economy is far more than this.

· Exemptions available for salaried class should be rationalized by increasing limits for exempt medical expenses, reintroduction of standard deduction etc.

· In individual taxation, deduction under Section 80C should be increased to Rs.3 lakhs with special investment eligibility for investment into bonds etc. issued for infrastructure activity by   eligible companies.