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The Confederation of Indian Industry (CII) has sought abolition of the contentious fringe benefit tax (FBT). It has said that the industry would be willing to pay an additional one per cent corporate tax on its total income in lieu of FBT.

“FBT should be abolished or the choice should be given to the tax paying firms to pay one per cent additional corporate income tax instead”, CII President R Seshasayee said on Monday. The existing corporate income tax is 30 per cent.

Seshsayee also called for the removal of 10 per cent surcharge on corporate income tax for domestic companies. “It will be more efficient to have one single rate of taxation rather than have a number of cesses and surcharges that only complicate the estimating of the tax burden on companies”, he said.

In a pre-budget presentation here, the CII president said that in the next year’s budget ( 2007-08), the government should also increase the tax exemption limit on tax saving instruments from the existing Rs 1 lakh to Rs 2 lakh, provided the additional Rs 1 lakh savings is in made in infrastructure bonds.

The CII has also called for abolition of minimum alternate tax (MAT) or “at least the rate should be brought down from 10 per cent to 7.5 per cent”.

It has also called for reduction on stamp duty on mergers. “The government should take necessary steps to convince the state governments to levy uniform stamp duty of five per cent on mergers, which should be gradually brought down to one per cent in three years”, it said.

Email: gaurav.choudhury@hindustantimes.com