New Delhi: Industry body CII on Thursday sought a reduction in Minimum Alternate Tax (MAT) on special economic zones at 10 percent in the upcoming Budget to boost investments.
In its Pre-Budget memorandum for 2015-16 submitted to the Finance Ministry, it has "strongly recommended that MAT should be reduced to 10 percent...The entire provision of MAT needs to be re-examined to incentivize investments".
MAT rates have more than doubled from 7.5 percent in 2007 to 18.5 percent at present.
It has also demanded that investment allowance eligible for deduction should also be reduced while calculating MAT.
"The period for availability of MAT credit may be extended from 10 years to 15 years to enable developers to claim credit in long-gestation projects. MAT relief should be granted to developers and units in SEZs," it added.
SEZs, which are major export hubs, contribute about one-third to the country?s total exports. They provide employment to about 15 lakh persons.
Exports from these zones increased from Rs 22,840 crore in 2005-06 to Rs 4.94 lakh crore in 2013-14.
The commerce ministry is struggling to increase exports as the country?s shipments in the last three years have been hovering around USD 300 billion.
India's exports in 2013-14 fell short of the USD 325 billion target and just managed to reach USD 312.35 billion.
The country's exports stood at USD 300.4 billion in 2012-13 and USD 307 billion in 2011-12.
