The government has agreed to lower corporate tax rate to 25 per cent for all companies once Goods and Services Tax (GST) mop-up improves, Ficci President Sandip Somany said Tuesday.
Somany, after meeting Finance Minister Arun Jaitley, spoke to reporters about a wide range of issues discussed involving taxation, job creation and boosting of industrial output.
As reported in the Quint, Somany said that Jaitley has promised that as the revenue collections from GST go up over a period of time, he will rationalise the taxes for the rest of the corporate sector over the next few years.
The 2015-16 budget contained the corporate tax the government had announced would be lowered by 25 per cent from 30 per cent across the next four years. Exemptions available to the companies would also be phased out.
The government has reduced corporate tax to 25% for companies whose turnover is less than 50 crore in the financial year 2015-2016. This left 96% of the total companies filing tax returns at an advantage.
In the budget of 2018-19, the government extended the reduced tax rate of 25 per cent to companies with turnover of up to Rs 250 crore, a move which benefited the micro, small and medium enterprises. After this, out of about 7 lakh companies filing returns, about 7,000 companies which file returns of income and whose turnover is above Rs 250 crores remains in 30 per cent slab.
Taking into consideration the US decision to withdraw duty benefits on Indian products under the Generalized System of Preferences (GSP) programme, Somany said it will make Indian industry less competitive.
Somany also said that he was confident that the government would take appropriate action and there would be a dialogue between the two governments to make sure that this is not withdrawn in case of India.
US President Donald Trump has said he wishes to end the preferential trade status granted to India and Turkey, stating that New Delhi has failed to assure America of “equitable and reasonable” access to its markets, an announcement that could hinder bilateral trade ties.
