Industry bodies have pitched for a reduction in the corporate tax rate and more incentives for attracting fresh investments at the pre-Budget meeting convened by finance minister Arun Jaitley. They have suggested lowering corporate tax to 18-25% from up to 30% at present.
“The finance minister has promised 25% corporate tax rate long back and we expect that he will fulfil his promise in this Budget,” Ficci president Pankaj Patel said.
“Across the world, people are reducing corporate taxes and India has among the highest rates. We do need to create more demand and capacities for private investment and if you see today, GST has increased the tax rates,” CII president Shobhana Kamineni said.
CII suggested that the road map should include reducing the corporate tax rate to 18% (all inclusive) at the earliest with withdrawal of tax incentives and exemptions and withdrawal of surcharges and cesses.
Jaitley is likely to present the Budget for 2018-19 on February 1.
Patel said the industry body also sought government support for innovation, employment generation through investment in MSME and startups sector, specific incentives for new investments and highlighted the need to establish an export zone having manufacturing facilities but without any taxes or regulations.
Exporters, who are grappling with blockage of working capital, sought exemption from tax on export income, lower rates on foreign exchange earnings and faster clearance of goods and services tax (GST) refunds.
“The implementation (of GST) and refund delays are a cause of concern, so we have suggested that if they can give us the IGST refund also along with the drawback,” EEPC India’s past chairman PK Shah said.
Assocham president Sandeep Jajodia said the body has sought that the corporate tax be reduced to 25%, in line with developed and industrialised nations, as it will help attract investments and create jobs.
PR Aqueel Ahmed, vice-chairman of the Council of Leather Exports, said: “We requested for acut in direct taxes and a scheme to boost women employment and expediting refunds under GST.”