• Notification Date: 23-11-2022
• Notification No: N/A

CII Urges Govt to Decriminalise GST Law in Budget

CII has urged the Government to reduce personal income tax rates. The industry body has pitched to decriminalize the goods and services tax and to reconsider the capital gains tax rates as part of its agenda presented to the government for the forthcoming Budget. 

In support of its demand, CII stated that the GST law already contains adequate penal provisions for deterrence against evasion of taxes. Hence, the GST law should be decriminalized. Moreover, the applicability of prosecution provisions is not supposed to be based on the absolute amount of tax evasion. Rather, it should be based on real intent to evade the taxes and a certain percentage of the payable tax. 

The President of CII, Sanjiv Bajaj stated that the Government should remodel the provisions for capital gains tax according to its rates and holding period. This would be beneficial in removing complexities and inconsistencies. The CII also suggested that the Government should plan for a reduction in the rates of personal income tax in its next attempt for reform. This step would enhance the disposable incomes and revive the demand cycle.  

As per the recommendations of the CII, tax certainty for businesses should continue and corporate tax rates are to be maintained at the current levels. There should be no arrests or detentions in civil cases unless criminalisation in business is proven.  

CII suggested the Government to contemplate a credible road map and to announce it while declaring the budget. This would ultimately reduce the fiscal deficit to 6 per cent of GDP in FY24 and to 4.5 per cent in FY26.  

The pre-Budget memorandum that has been presented to the Finance Ministry also requires a raise in capital spending to 3.3-3.4 percent from 2.9 percent of the GDP for reviving investment. The aim should be to further increase it to 3.8-3.9 percent by FY25.