Budget 2024: Enhance Safe Harbour Threshold, Ease Transfer Pricing, Ask Industry Bodies
Continued capex focus from the government and faster environmental clearances for infrastructure projects, were also part of the wishlist.
Enhancing the safe harbour threshold limit and easing the transfer pricing regime were some of the suggestions that industry bodies gave to the finance ministry ahead of the upcoming July Budget.
Industries and export promotion bodies met with Union Finance Minister Nirmala Sitharaman on Tuesday as part of the week-long pre-budget consultations held at the North Block in New Delhi—the seat of India's finance ministry in the National Capital.
The Federation of Indian Export Organisations suggested that the government incentivise research and development through a 250–300% weighed tax deduction under Section 35(2AB) and that such benefits be extended to LLPs, partnerships, and propreitary firms, Ajay Sahai, director general and chief executive officer of the body, told NDTV Profit.
The interest equalisation scheme is helping exports and should be extended for five years after June 30, 2024, when it will come to an end, he said. Sahai also asked for subvention rates to be restored from 3% to 5% for micro, small, and medium manufacturers.
HM Bangur, chairman of Shree Cement Ltd., hoped for government support to help the private sector grow and for an easier flow of capital for the same. His wishlist also included continued capex focus from the government and faster and simultaneous environmental clearances for infrastructure projects. Government efforts must be made to improve the tax-to-GDP ratio, he said.
From a budget perspective, the National Association of Software and Service Companies sought to ease the transfer pricing regime, according to Ashish Aggarwal, vice president and head of public policy of the body.
Nasscom has also asked the government to enhance the scope of the safe harbour regime, by increasing the threshold limit from Rs 200 crore for international transactions to Rs 2,000 crore so that global capability centres can benefit from the safe harbour policies, Aggarwal said.
Strengthening the Advance Pricing Agreement to promote ease of doing business was also among Nasscom's suggestions.
Tuesday's first session marks the seventh pre-budget consultation with representatives of trade and services to take suggestions for the upcoming General Budget 2024–25.
The session was also attended by the Union Minister of State for Finance, Pankaj Chaudhary, India's Finance Secretary, the Secretary of the Department of Economic Affairs and Ministry of Commerce and Industry, and the Chief Economic Adviser for the Government of India.
