In­dia Inc pitches for tax rate cut

Also seeks eas­ier GST com­pli­ance at pre-Bud­get meet­ing with Arun Jait­ley

The Hindu Business Line - - FRONT PAGE -

In­dia Inc on Wed­nes­day sought a re­duc­tion in the cor­po­rate tax rate and eas­ier com­pli­ance norms for the Goods and Ser­vices Tax (GST) at a pre-Bud­get meet­ing with Fi­nance Min­is­ter Arun Jait­ley.

“We have sug­gested that the cor­po­rate tax rate be low­ered to 18 per cent along with re­moval of all tax in­cen­tives and sur­charges and cesses, as this will lower the tax bur­den on firms and also make the coun­try more at­trac­tive to in­vestors,” said Shobana Kami­neni, President, CII.

The is­sue was also raised by in­dus­try body FICCI, which pointed out that the US is also on the verge of re­duc­ing the cor­po­rate tax rate from a top rate of 35 per cent to 20 per cent and pro­vid­ing re­lief to in­di­vid­u­als.

“Al­though a roadmap for bring­ing down cor­po­rate tax rates to 25 per cent was laid out in the ear­lier Bud­get, this has not yet been im­ple­mented across the board,” said Pankaj Pa­tel, President, FICCI.

As­socham President San­deep Ja­jo­dia said the in­dus­try body has asked for cor­po­rate Fi­nance Min­is­ter Arun Jait­ley

tax to be re­duced to 25 per cent, in line with de­vel­oped and in­dus­tri­alised na­tions, as it will help at­tract in­vest­ments and cre­ate jobs.

“Div­i­dend distri­bu­tion tax, which is around 20 per cent, should also be lower,” he said.

‘In­vest more’

The Fi­nance Min­is­ter urged com­pa­nies to in­vest more in the in­fra­struc­ture sec­tor and said that pri­vate in­vest­ments, along with pub­lic and for­eign in­vest­ments, are key to boost­ing growth and cre­at­ing job op­por­tu­ni­ties.

“The govern­ment has taken var­i­ous steps and has also set up a Na­tional In­vest­ment and In­fra­struc­ture Fund to boost in­vest­ment in this sec­tor,” he said.

This was the third pre-Bud­get meet­ing held by the Min­is­ter, who, later in the day, also met so­cial sec­tor rep­re­sen­ta­tives, in­clud­ing trade union lead­ers, for their in­puts.

Mean­while, ex­porters, still fac­ing prob­lems of blocked work­ing cap­i­tal, sought ex­emp­tion from tax on ex­port in­come, lower rates on forex earn­ings, and faster clear­ance of GST re­funds.

“We called for ex­emp­tion from IGST on all in­stru­ments pro­vid­ing ba­sic Cus­toms du­tyfree im­ports, both on in­puts and cap­i­tal goods,” said Ganesh Ku­mar Gupta, President, FIEO. He said the fed­er­a­tion also pro­posed a com­pre­hen­sive Duty Draw­back Scheme that would cover the in­ci­dence of both ba­sic Cus­toms duty and in­put tax credit.

Mean­while, CII has also called for ra­tio­nal­i­sa­tion of GST into four rates — 5 per cent, 12 per cent, 18 per cent and 28 per cent — as well as in­clu­sion of sec­tors such as petroleum, al­co­hol and real es­tate within the am­bit of the new levy.

This is the first Union Bud­get af­ter the roll­out of GST on July 1 this year. It is ex­pected to be tabled in Par­lia­ment on Fe­bru­ary 1.

In Bud­get 2015-16, Jait­ley had an­nounced a grad­ual low­er­ing of the cor­po­rate tax rate to 25 per cent over the next four years, along with an elim­i­na­tion of ex­emp­tions.

He has al­ready cut the tax rate for new man­u­fac­tur­ing com­pa­nies that do not utilise any ex­emp­tion, and firms with an an­nual turnover of less than ₹50 crore.

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