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Last Updated : Sep 20, 2019 09:57 PM IST | Source: Moneycontrol.com

'Looks like Diwali has come early': Auto sector hails corporate tax rate cut

Pawan Goenka, MD, Mahindra and Mahindra, tweeted: "Looks like Diwali has come early."

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With Finance Minister Nirmala Sitharaman slashing corporate tax rates, India Inc representatives feel the move has come at the right time and will boost the sluggish business environment.

Pawan Goenka, MD, Mahindra and Mahindra, tweeted: "Looks like Diwali has come early."

Shekar Viswanathan, Vice Chairman, Toyota Kirloskar Motors, “For all profit-making companies it is a big booster. Cash flows will improve and overall sentiments will also get a move upwards. The stock market has also reacted to that. Whether that will translate to incremental car sales only time will tell. But certainly, it is the right move in the right direction by government of India.

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"If this comes along with GST rate reduction then it will be a big positive for the industry. When there is a rate cut, we will be passing on the benefit to the consumer. So, from a consumer standpoint a GST rate cut will be very good. But these things are easily wished for than they come into practice. But the government has been very sensible, and we applaud the government for it, added Viswanathan.

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Martin Schwenk, MD&CEO at Mercedes-Benz India, said, "Reduction in corporate tax to 22 per cent is a shot in the arm as it is directly correlated to economic growth. Reduction of corporate tax has been on the agenda and it will also boost ‘Make in India' initiatives. It will promote investment, help sustain profitability during challenging times and should also improve buying sentiments, thus helping the auto sector in long term”.

Rajan Wadhera, President, the Society of India Automotive Manufacturers (SIAM) welcomed the announcements made by the minister. "The reduction of corporate tax to 15 percent for new companies making fresh investments from 1st October 2019, will support investment and also FDI in the auto sector. This is expected to give a big boost to Make in India for automobile industry"

"Finance Minister's announcement on slashing corporate tax will give necessary fillip to the economy which we’ve been hoping for. We have had a series of measures and today's measures are the largest," Piyush Goyal, Commerce and Industry Minister, said.

Also read: Nirmala Sitharaman brings early Diwali for India Inc: Effective corporate tax slashed to 25.17% for domestic cos

All of this comes in addition to some of the previous announcements made by Sitharaman including lower auto loans, the use of BSVI vehicles till registration period ends and a new scrappage policy for cars older than 15 years.

Also read: TaMo expects positive outcome from GST Council meeting

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First Published on Sep 20, 2019 02:05 pm
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