Tax reliefs sought for infrastructure projects

New Delhi, June 24

The Associated Chambers of Commerce and Industry of India (Assocham) Wednesday urged the government to exempt infrastructure projects from excise, value-added tax (VAT) and central sales tax (CST) to make them more cost-effective.

"On account of excise, VAT and CST, the capital costs of projects become dearer by over 20-25 percent which puts huge burden on companies commissioning infrastructure projects," said Assocham president Sajjan Jindal.

In its pre-budget recommendation to Finance Minister Pranab Mukherjee, the chamber advocated exempting infrastructure development projects in the power, road, port, oil and gas and irrigation sectors from excise, VAT and CST till these are commissioned.

Assocham also said the 10 percent service tax imposed on such projects during the implementation phase needed to be discontinued since infrastructure is a priority area for the government.

Additionally, it called for interest exemptions for infrastructure bonds along with incentives for making such investments, as it was given in the case of India Development Bonds.

The chamber has also suggested that excise duty on construction equipment be reduced from eight percent to four percent.

It has sought extension of a 10-year tax holiday for cold chain establishments from start of the year.

Last updated on Jun 24^th, 2009 at 18:44 pm IST--IANS

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