The Hindu Business Line : Chamber opposes hike in MAT rates

New Delhi, July 20 The Federation of Indian Chambers of Commerce and Industry (FICCI) has opposed the hike in Minimum Alternative Tax (MAT) rates to 15 per cent from 10 per cent.

In its post-Budget memorandum submitted to the Finance Secretary, the Revenue Secretary and other Finance Ministry officials, the chamber has asked for the MAT to be retained at the current 10 per cent.

It has also opposed the retrospective amendment of the computation of Book Profit for companies. Stating that a retrospective amendment would have ‘large financial implications’ the chamber has asked the Government to make it effective from assessment year 2011-12 onwards.

The FICCI suggested that investment companies whose only source of income is dividend, interests or capital gains, should be exempted from paying MAT.

It also seeks a similar exemption for small and medium enterprises.

Further, the chamber says that profits of an enterprise exempt from taxation under sections 10A, 10AA, 10B and others should not be forced to pay MAT as it cancels out the incentives of the other tax exemptions.

Regarding the tax holidays given to enterprises engaged in commercial production of mineral oil and natural gas, the chamber has raised concerns over the present jurisdictions of the tax holiday. It feels that by limiting the tax holiday to blocks which commence production after April 1, 2009, licensed under the National Exploration Licensing Policy VIII would be discrimination and send undue negative signals.

Also, no mention has been made of coal-bed methane (CBM). The chamber also has asked for extending the benefits of tax holiday to CBM as well.

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