New Delhi, Jan 14 (IANS): Calling for some tax reforms to revive growth, the Confederation of Indian Industry (CII) Monday asked the government to allow higher depreciation rate on plant and machinery from the current 15 percent to 25 percent for the next three to five years.

In its pre-budget memorandum to the finance ministry, CII also called for abolishing surcharge and cess from corporate tax, and exempting infrastructure and Special Economic Zones (SEZ) companies from levy of minimum alternate tax (MAT) to incentivize new investments.

"At a time when new investments have reduced to nearly half of the last year level cutting across all sectors, raising depreciation rate on plant and machinery will incentivize industry to make fresh investments," CII Director General Chandarajit Banerjee said here in a statement.

Further, in view of the delay in implementing the goods and services tax (GST), CII suggested a reduction in the central sales tax (CST) rate from two percent to one percent to help stimulate the investment momentum in the economy.

"CII has resisted from asking for stimulus package involving reduction in excise and service tax rates in view of already high level of fiscal deficit and hoped that the rates will not be increased either," the statement said.

CII said it is for continuing of the 10 percent rate of customs duty at a time when excess capacity in the global economy could lead to surge in imports and mar recovery prospects of domestic industry.

According to CII, raising the depreciation rate on plant and machinery will allow project developers to obtain full tax advantage of depreciation in a shorter period of time, thus giving incentive for fresh investments without affecting revenue collection for the government.