Finance Minister Nirmala Sitharaman on Monday said the government will consider an extension in the deadline for availing the lower 15 percent corporate tax rate on new investments, due to the COVID-19 pandemic. In the biggest reduction in 28 years, the government in September last year slashed corporate tax rates by up to 10 percentage points to attract private investment and push sagging economic growth.
Base corporate tax for existing companies was reduced to 22 percent from 30 percent, and to 15 percent from 25 percent for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023.
"I will see what can be done. We want industry to benefit from the 15 percent corporate tax rate on new investments and I take your point for considering an extension in the deadline of March 31, 2023," Sitharaman said.
Addressing members of FICCI, the minister assured the industry of all possible government support with the intent of supporting Indian business and reviving the economy.
Sitharaman clarified that the COVID-19 Emergency Credit Facility covers all companies and not just micro, small and medium enterprises (MSMEs).
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On the question of liquidity, she said, "We have fairly clearly addressed the issue of liquidity. There is definitely the availability of the liquidity. We will look into it if there are still issues."
She also said every government department has been told to clear dues and if there is any issue with any department, the government will look into it.
The finance minister also said the government will consider an extension in the deadline for availing the 15 percent corporate tax rate on new investments.
The minister suggested the industry to submit their recommendations related to the ministry of corporate affairs or Sebi deadlines so that necessary steps could be taken.
With regard to the need for reduction in GST rates in the badly affected sectors, She said, "GST rate reduction will go to the Council. But, the GST Council is also looking for revenue. The decision for reduction in rate for any sector has to be taken by the Council."
Revenue Secretary Ajay Bhushan Pandey told FICCI members that income tax refund to the corporates has also started and income tax refunds of Rs 35,000 crore have been issued in the past few weeks.Follow our full coverage of the coronavirus pandemic here.