Stating that the NDA government, if voted back to power, would consider reducing the corporate tax rate for all firms to 25% provided the goods and service tax (GST) collections improve, finance minister Arun Jaitley on Tuesday told industry captains to pass on the benefits of recent GST cuts to consumers by lowering prices.
Presenting a paper ‘Agenda for Growth and Shared Prosperity’ before the minister, industry chamber FICCI’s president Sandip Somany sought reduction of the corporate tax rate for all companies irrespective of their turnovers.
In Budget for FY16, the government had unveiled a plan to reduce the corporate tax rate from 30% to 25% “in four years” to make India’s tax rates globally competitive.
However, its implementation has been partial due to concerns on revenue front. It has since cut the corporate tax rate to 25% for those companies which reported a total turnover of up to `250 crore, largely benefiting MSMEs.
Over the last few months, the GST Council has effected rate cuts on over 100 items including white goods and under-construction houses. While at the time of GST launch, more than 250 items attracted 28% GST, only 30 items remain in the highest slab 18 months later.
The minister said that GST is now on the track and is in process of fast settling down. “The thrust of the government is to lower the tax rate and increase the tax base and keep the revenue collections moving-up,” he was quoted as telling the FICCI delegation.
In the meeting, the importance of the NBFC sector was highlighted and FICCI members drew attention to growth in the consumer durables and real estate sector, much of which was supported by the NBFC sector. In this context FICCI noted that while the liquidity situation in the market had improved, some more steps were needed to restore the situation to complete normalcy.
Discussions were also held on the need to take all possible steps to improve employment generation in the economy. FICCI urged reintroduction of investment allowance linked with employment generation.
