Tamil Nadu business community satisfied with budget

February 29th, 2008 - 11:10 pm ICT by admin  

A file-photo of P. Chidambaram

Chennai, Feb 29 (IANS) The Tamil Nadu business community has expressed its satisfaction at the national budget 2008-09 Finance Minister P. Chidambaram presented in parliament Friday. According to P.K. Mohapatra, chairman, Confederation of Indian Industry (CII), southern region, the proposal to bring down central value added tax (Cenvat) from 16 percent to 14 percent and the central sales tax (CST) down to 2 percent by next year and replacing the CST with general sales tax (GST) by 2010 are the three major steps taken in right direction.

“The 125 percent tax break to research and development (R&D) outsourcing companies, customs and excise duty reductions are very well received by the industry and are in line with the industry expectations,” he said.

However, the information and technology (IT) industry representatives are not happy with the finance minister’s budget.

The IT industry was expecting that the software technology parks of India (STPI) tax benefits would be extended beyond 2009 and there would be some incentives for the export oriented industries that were facing a hard time because of rupee appreciation.

“Reducing the excise duty on the small cars alone has actually widened the gap between small and other car segments. The excise duty on the mid-size car now stands at 24 percent, double that of a small car, which is disappointing for the customers of mid-size and larger cars,” said Arvind Mathew, president and managing director, Ford India.

R. Santhanam, managing director, Hindustan Motors Limited, said the announcement of zero customs duty for import of steel and alloyed steel scraps would immensely benefit the secondary steel manufacturers.

“For the first time the union budget addressed the concerns of energy transmission and distribution (T&D) companies by taking steps to create a national fund for T&D reforms with a corpus of Rs.8 billion,” said Narayan Sethuramon, managing director, W.S. Industries (India) Limited.

K. Sridharan, chief financial officer (CFO), Ashok Leyland Limited, said that while the reduction in tax rates are a welcome move, the minister has not provided any incentives for new investments, which is very critical for capacity addition.

S. Chandramohan, CFO, TAFE Limited, said the target of bringing 500,000 hectares of land under irrigation is not ambitious enough, as the original target itself was to bring 2.3 million hectares under irrigation.

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