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Feb 28, 2012, 05.50 PM IST | Source: CNBC-TV18

Budget Expectations: Removing MAT will signal strong message: NASSCOM's Mittal

From this year's Budget, Som Mittal, President, NASSCOM expects the minimum alternate tax to be removed.

It's very important that MAT is removed as it signals a very strong message.

Som Mittal

President

NASSCOM

The Union Budget will be presented on March 16 post the State elections. This could be the UPA government's final showdown. The economy is going through a slow phase, the bureaucracy is in a state of paralysis and corporate India is suffering from a bout of depression.

Given these fiscal and political constraints, can Finance Minister Pranab Mukherjee change the mood of the nation? Will he present an agenda for growth or a statement of accounts?

From this year’s Budget, Som Mittal, president, NASSCOM expects the MST to be removed. “We have formed a great scheme called SEZ. Last year we introduced minimum alternate tax (MAT) on it, it gave a very wrong signal and I hope this year the finance minister will remove the MAT.”

He adds, “It doesn’t have an impact on the extra creditor and its cash flows because anyway it's adjusted over a period of 15 years but for us it's very important that MAT is removed as it signals a very strong message.”

Last year, Minimum Alternate Tax (MAT) OF 18.5 percent on Special Economic Zone (SEZ) developers and units was imposed by the Finance Minister as a result of which there was a sharp deceleration in investments in SEZs.

While the commerce ministry is considering various measures to dilute the conditions for setting up an SEZ, many, including Mittal are hoping that the finance minister will remove MAT for SEZ units and developers.

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