Ms Swati Piramal

Our Bureau

Hyderabad, Nov. 6

The proposed new Direct Taxes Code based on taxation of assets will be detrimental to the growth of investments and industry, according to Ms Swati Piramal, President of the Associated Chambers of Commerce and Industry (Assocham).

Addressing newspersons here on Thursday, Ms Piramal said the Government should retain the existing profits-based taxation rather than switching to the new system.

“It was said that from 2010-11, the new direct taxes code will be in place. If assets are taxed, long-term infrastructure projects such as ports, airports and IT zones will be affected as the gestation period is longer,” she said.

The industry was already concerned with the proposal. “The investment heads and CFOs of major companies have been discussing the adverse fallout of this. I think credit off-take has also been affected because of this fear,” she added.

Ms Piramal, who has taken over as President of Assocham recently, is to meet the Prime Minister, Dr Manmohan Singh. “I will convey industry’s objections to him in this regard,” she said.

Assocham will launch an awareness campaign on the disadvantages of the proposed code through seminars and talks.

“Even though we have conveyed our concerns about the asset-based taxation, there has been no response from the Government. In fact, not many in the Government know the implications of the proposed change,” she added.

The fiscal stimulus announced previously by the Government to negate the impact of slowdown should be continued for a period of two-three more years, Ms Piramal said.

“This is vital for exports and manufacturing industry. The quick implementation of GST and stabilisation of interest rates are also important,” she added.

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