Key Recommendations Put Forward by FNCCI

• Decriminalization of Commercial Disputes: The federation urged an end to the practice of unnecessarily arresting and detaining entrepreneurs during investigations by treating commercial and financial disputes as criminal offenses. It called for effective bail and anticipatory bail provisions, alongside clear legal distinctions to protect innocent business owners by differentiating between willful and non-willful defaulters.
• Integrated Tax Code and Tax Administration Reforms: FNCCI proposed formulating an integrated tax code consolidating income tax, VAT, customs, and excise duties. Key administrative changes include reinstating district-level Tax Payers Service Offices, ensuring automatic refunds for overpaid taxes with interest for delays, and establishing an independent expert-led review mechanism under the Ministry of Finance.
• Scrapping VAT on Electricity: Pointing out that VAT on electricity consumption implemented in the current fiscal year has driven up operating costs, the federation urged its removal. It also stressed the need to address high logistics costs and unfavorable tax policies.
• Customs Valuation and Procedural Streamlining: The federation recommended ending subjective customs valuation based on reference values, advocating instead for real transaction values aligned with WTO/GATT guidelines. Additional proposals include a risk-based check-pass system, extended timelines for warranty returns, and the elimination of raw material quotas.
• Streamlining Environmental and Industrial Testing: FNCCI called for the removal of cumbersome requirements for frequent Environmental Impact Assessments (EIA) or Initial Environmental Examinations (IEE) during capital or capacity expansions. Modernizing amendments were also suggested for the Special Economic Zone (SEZ) Act, Land Related Act, Foreign Investment and Technology Transfer Act (FITTA), and the Labor Act.
• Export Subsidies and Credit Insurance: The business body demanded immediate clearance of export subsidy arrears, the reinstatement of traditional export-based subsidy systems, and the implementation of an export credit insurance framework to mitigate international order cancellations.
• Real Estate and Agency Registration Reforms: The federation highlighted the need to clear legal ambiguities surrounding apartments and joint dwellings, clarify Land Act demarcation rules for real estate firms, and eliminate double-deposit requirements for registering new variants of existing agency brands.