With the Union Budget 2025 approaching, key industry bodies in India, including FICCI, CII, ASSOCHAM, and PHDCCI, have presented their detailed recommendations to the Finance Ministry. Their priorities include a customs amnesty scheme, tax reductions for individuals and LLPs, streamlined tax compliance, and enhanced dispute resolution mechanisms. These reforms aim to create a more business-friendly environment and strengthen India’s economic foundation.
Amnesty Scheme for Customs
FICCI and ASSOCHAM have recommended an “Amnesty Scheme under Customs,” a one-time settlement program to clear past customs-related dues. This proposal mirrors past initiatives like the Sabka Vishwas Legacy Dispute Resolution Scheme (2019) and the Vivad Se Vishwas (2020), which were successful in reducing litigation related to indirect and direct taxes, respectively. An amnesty scheme under customs would provide partial or complete waiver of interest and penalties, depending on the quantum involved, thereby offering relief to importers and reducing the backlog of cases.
Simplified Tax Compliance
All major industry bodies are seeking simpler tax compliance processes. The primary areas of focus include easing tax deducted at source (TDS) requirements, reducing tax rates for Limited Liability Partnerships (LLPs), and establishing an independent Dispute Resolution forum to expedite tax appeals. These steps are designed to minimize tax-related friction, attract more foreign direct investments, and improve India’s rank in the ease of doing business.
Tax Reductions and Incentives
PHDCCI is lobbying for tax reductions, especially for individuals and LLPs, and a streamlined presumptive tax scheme for professionals. Another area of focus is the Production-Linked Incentive (PLI) scheme, which the chamber recommends expanding beyond the current 14 sectors to support wider industry growth and resilience, especially in MSMEs. Additionally, they have urged the government to enhance financial support for export-oriented MSMEs through adjustments in the interest equalization scheme on pre and post-shipment export credit.
Focus on Women Empowerment and Economic Growth
FICCI has also requested specific incentives for women-led initiatives, including exemptions from perquisite tax on daycare reimbursements, as part of the government’s larger goal of encouraging women’s participation in the workforce. The body believes that such initiatives would drive sustainable, inclusive growth.
Expanding Capital Expenditure
With a 25% boost in capital expenditure (Capex) for the fiscal year 2025-26, CII has advocated for focused investments in rural infrastructure, agriculture, and social sectors. This push aligns with CII’s goal of enhancing India’s infrastructure to support holistic development across both urban and rural regions.
Conclusion
India Inc. anticipates that these reforms will be considered in the upcoming Union Budget, scheduled for February 1, 2025. The recommendations, if adopted, could transform India’s business landscape, encouraging growth and reducing regulatory complexities.
Web Team, C6N, Mumbai
