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Moneycontrol » News Center » Markets » Market Cues
CII wants FBT removed
Published on Thu, Feb 15, 2007 at 12:36   |  Updated at Fri, Feb 16, 2007 at 21:54  |  Source : Moneycontrol.com
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CII: Confederation of Indian Industry wants FBT to be removed. But if it is not removed, the chamber wants the government to allow firms the option of paying an additional 1 per cent corporate tax in place of FBT, according to a report published by Business Standard.
 
In this year’s pre-budget memorandum, CII has come out with a third option as well, by suggesting that if the government has to levy FBT then it should be only on elements of personal benefit to employees, and exclude pure business expenses in line with the practice followed in a number of countries.
 
Expenses like travelling, hotel boarding, sales promotion, conference expenses are genuine business expenditures and taxing them only affects the competitiveness of industries in a global market, the chamber says.
 
FICCI: Federation of Indian Chambers of Commerce and Industry, in its pre-budget memorandum, has said that genuine business expenses should be kept outside the purview of FBT.
 
While the removal of FBT on advertising expenses, expenses on doctor samples and celebrity endorsements are welcome, other genuine sales promotion activities such as providing trial samples to consumers, freebies etc should also be exempt from FBT.
 
The industry chamber suggests that the amount paid as FBT should be allowed deduction under Section 40(A) and the tax should also be allowed deduction on the lines of taxes like excise duty, stamp duty and customs duty.
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