Cut corporate tax, abolish MAT in forthcoming Budget, says industry body FICCI as BJP-led NDA govt gears up for its second term

Industry body FICCI on Friday sought a reduction in corporate tax and abolition of Minimum Alternate Tax (MAT) to spur investment as the BJP-led NDA government gears up for its second term

Press Trust of India May 24, 2019 19:38:35 IST
Cut corporate tax, abolish MAT in forthcoming Budget, says industry body FICCI as BJP-led NDA govt gears up for its second term
  • The government had presented an Interim Budget for 2019-20 in February

  • A full Budget is likely to be presented in July

  • The corporate tax rate was reduced to 25 percent for companies with a turnover of up to Rs 250 crore

New Delhi: Industry body FICCI on Friday sought a reduction in corporate tax and abolition of Minimum Alternate Tax (MAT) to spur investment as the BJP-led NDA government gears up for its second term.

The government had presented an Interim Budget for 2019-20 in February. A full Budget is likely to be presented in July.

"The key recommendation was that the focus of the government should be to spur domestic investment and in order to retain India's competitiveness globally, corporate tax rate cut should be considered," FICCI said after its delegation met Revenue Secretary Ajay Bhushan Pandey as part of the pre-budget discussion.

Cut corporate tax abolish MAT in forthcoming Budget says industry body FICCI as BJPled NDA govt gears up for its second term

Representational image. Reuters.

In the 2015-16 budget, the government had announced that the corporate tax rate would be gradually lowered to 25 percent from 30 percent over the next four years and exemptions available to companies would be phased out.

In subsequent years, the tax rate was reduced to 25 percent for companies with a turnover of up to Rs 250 crore.

During the meeting, FICCI said with phasing out of exemptions and deductions available under the Income Tax Act and to avoid complexities arising under new accounting norms, there is a need to review the concept of MAT.

"A recommendation has been made to abolish MAT and extend a simpler Alternate Minimum Tax as is currently applicable to non-corporate to corporates, but at a reduced rate of 10 percent considering the reduction in the corporate tax rate to 25 percent in line with the global trend," it said.

On the indirect tax side, FICCI said currently Merchandise Export from India Scheme (MEIS) and Service Export from India Scheme (SEIS) scrips cannot be utilised for payment of Integrated Goods and Services Tax (IGST) and GST compensation cess on imports.

The non-availability of utilising the scrips towards the payment of IGST has led to a financial burden on the importers.

It was recommended that the Foreign Trade Policy 2015-20 and Customs Law need to be amended for allowing the utilisation of MEIS and SEIS scrips towards the payment of GST on imports, it added.

Updated Date:

also read

BSF jurisdiction row: Punjab CM  ‘surrendered’ more than half state to Centre, claims AAP
Politics

BSF jurisdiction row: Punjab CM  ‘surrendered’ more than half state to Centre, claims AAP

The Centre has increased the powers of the BSF by increasing its jurisdiction in poll-bound Punjab by up to 50 km from the international border

Guts and Glory: Of Narendra Modi, Mahendra Singh Dhoni and their leadership
Politics

Guts and Glory: Of Narendra Modi, Mahendra Singh Dhoni and their leadership

Since his days as Gujarat Chief Minister, Modi repeatedly said that, with the same laws, same rules, same officers, same people, same files, he has shown things can happen

Explained: How deal struck between 136 countries will stem corporate use of tax havens
World

Explained: How deal struck between 136 countries will stem corporate use of tax havens

The agreement, signed by the countries after talks overseen by the Organization for Economic Cooperation and Development, will update the international taxation rules to cope with changes brought by digitalisation and globalisation