Finance Minister Nirmala Sitharaman on Monday said the government will consider an extension in the deadline for availing the lower 15 per cent corporate tax rate on new investments, due to the Covid-19 pandemic. The concessional corporation tax rate against the existing 25-30 per cent is available 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 per cent corporation 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 industry body Ficci.
The finance minister also said that demand for GST rate reductions would go to the GST Council, but the body of union and state finance ministers is also looking at revenue.
The decision for rate cut for any sector has to be taken by the Council, she said. The Council is likely to meet on Friday through video conferencing. The beleaguered sectors such as automobiles are asking for reduction in GST rates.
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).
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 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.
In an attempt to perk up the economy, Finance minister Nirmala Sitharaman had on September 20, 2019 announced corporation tax rate cut for new manufacturing units. With cess and surcharges this comes to 29.12 per cent at present and with new rate structure that would be cut to 17.01 per cent or by about 12 percentage points. These companies also need not pay any minimum alternate tax (MAT). The rate was also cut to 25 per cent for existing companies that do not avail any exemption. Besides, the minimum alternate tax (MAT) was cut to 15 per cent from the current 18.5 per cent for existing companies.
Before the presentation of the Budget, the department of commerce, in a proposal to finance ministry had sought an extension of the lower corporation tax offer of 15% by two years, which will give companies time till March 31, 2025 to set up production, as against the 2023 deadline as of now.