From the Press
NBFCs` organisation seeks sops in Union budget
Our Regional Bureau / Ahmedabad / Business Standard / July 01,2004
The Finance Industry Development Council (FIDC), an umbrella organisation of non-banking financial companies that are eligible to accept public deposits, has submitted a pre-budget memorandum to the Union finance minister P Chidambaram.
"Our main objective is to work towards bringing discipline among our members by enforcing a model code of conduct, besides presenting a unified face of this sector," said Mahesh Thakkar, co-ordinator, FIDC.
The pre-budget memorandum includes issues related to road transport, Income Tax Act 1961, and service tax on hire purchase and lease transactions.
The council demanded considering road transport finance on par with housing finance and setting up of a new refinance corporation for NBFCs engaged in road transport finance on the lines of the National Housing Bank.
The council also demanded that NBFCs registered with the Reserve Bank of India (RBI) be covered under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2002.
The council demanded that tax benefits for income deferral in NPA accounts under section 43 D of Income Tax Act to be extended to NBFCs and exemption to NBFCs registered with the RBI from applicability of TDS provisions under various sections of the Income Tax Act.
The council also said benefits under section 10 (23G) and 36 (1) (viii) of the Income Tax Act be made available for leasing, hire purchase finance as well as loans granted to infrastructure activies by NBFCs.
The council also demanded that service tax in case of lease and hire purchase transaction should only be levied on lease management fees, processing charges, document charges and not on the lease and hire purchase rentals or instalments.
FIDC, a self regulatory organisation, was formed by non-banking financial companies which are registered with the RBI and authorised to accept public deposits.
The council is expected to meet the finance minister before the budget to discuss some of the important issues.