Financial Daily from THE HINDU group of publications
Thursday, Nov 13, 2003

News
Features
Stocks
Port Info
Archives

Group Sites

Industry & Economy - Taxation


Case made out for MAT withdrawal

K.R. Srivats
Richa Mishra

The argument that has been put forth is that MAT has "affected" the internal resource generation of the companies resulting in a "severe blow" to their plans for expansion and diversification.

New Delhi , Nov. 12

INDIA Inc continues to be on the mat when it comes to the minimum alternative tax (MAT).

With barely four months to go before the next edition of the Union Budget, a section of Corporate India has started pitching for withdrawing MAT or at least a restructuring of the tax.

This issue may be raised at the three-day international conference, starting tomorrow, on `Investment-friendly tax and corporate law regime'. The conference is being organised by the Federation of Indian Chambers of Commerce and Industry . A note prepared for the conference has made a case for the withdrawal of MAT.

The argument that has been put forth is that MAT has "affected" the internal resource generation of the companies resulting in a "severe blow" to their plans for expansion and diversification.

A case has also been made for restoration of tax credit facility on MAT. It has been held that "it is not fair to deny credit" for such deemed tax, against the legitimate taxes payable in subsequent years.

"The fact that many of the big corporates who earned substantial profits do not pay any tax may sound incongruous, but the larger picture needs to be seen to understand it correctly. Although it may be true that these companies may not be paying any direct tax, what about the huge amount of indirect taxes that they contribute to the national and State exchequers," asks the note.

Further, a section of India Inc says as a matter of principle there should be no tax on dividend income.

At least, the dividend distribution tax on corporate assesses should be removed for "group company" dividend distribution. The dividend distribution tax should be imposed only on the holding company, feel industry officials.

Article E-Mail :: Comment :: Syndication

Stories in this Section
`Pension reforms should cover more people'


AMGF Intercorp launches FMCG awards
Manufacturing aids industry post 6.5 pc growth in Sept
Engg expo to showcase SSI units as vendors
Indo-Singaporean trade pact by April
`Telemedicine can boost healthcare reach'
White kerosene proves lucrative for racketeers
Nicholas Piramal quits pharma alliance
Rs 10,000 cr set aside to update power plants
Move to assess small hydropower potential in Kerala
Meet discusses steps to avoid blackouts in western region
Case made out for MAT withdrawal
Truck, bus tyre production up in Sept
Realtors express concern over eco ministry's notification
AP tax incentive to aluminium cos
Plan to develop Maharashtra as biotech destination
After Jayalalithaa's statement — The Hindu withdraws request for CISF cover
IOC, ONGC equity offer in domestic market proposed
Natco to challenge grant of exclusive rights to Novartis cancer drug
AP: Rural employment schemes
Campaign to issue birth certificates
Facilities management biz gaining ground in Bangalore
`Human chain' to protest TN House order
Impose ceiling on tax-free donation
Used photocopiers, ACs, gensets can't be imported under EPCG
Tea exports to Pak pegged at 6 mkg
Western Coalfields sees lower output on unviable mines


The Hindu Group: Home | About Us | Copyright | Archives | Contacts | Subscription
Group Sites: The Hindu | Business Line | The Sportstar | Frontline | The Hindu eBooks | Home |

Copyright 2003, The Hindu Business Line. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu Business Line