JOIN USCentre asks India Inc to speed up investment as concessional tax rate has a sunset clause
After handing out a concessional tax rate in the Budget, govt asks India Inc to speed up new investment in manufacturing as there is a sunset clause on the special dispensation of concessional 15 per cent tax on companies setting up greenfield manufacturing facilities.
The Budget of 2022-23 proposed that the concessional rate of 15 per cent corporate tax will be available for one more year till March 2024 for newly incorporated manufacturing units.
"The message is very clear that we would like you to set up your factories and manufacturing units fast, the time limit given has been extended by one more year and yes, there will be a sunset clause and then we will move to 22 per cent, which is what the corporate tax rate is. This is being given as special dispensation for manufacturing units to set up their factories sooner than later," Revenue Secretary Tarun Bajaj said at an event at industry chamber Assocham.
The revenue secretary also shared optimism about the tax buoyancy as the economy is on the path of recovery.
''Our Tax to GDP ratio which had gone below 10 per cent in the year we had brought down the corporate tax, would be the highest or one of the highest -direct and indirect taken together in the current financial year," he said.
He said the new corporate tax regime is settling down as more and more companies are exhausting their exemptions and moving towards the lower rate of 22 per cent.
''My own assessment is, as companies exhaust their exemptions, they would start moving to the new tax regime because there is a big difference between 30 and 22 per cent corporate India would be benefited''.
Enumerating the features of the Budget for 2022-23, Bajaj said the quality of expenditure has been improving for the past three years. ''It was very important to give a push to the economy, GDP. While giving a message, we are in the consolidation of our finances, at the same time we are willing to invest more''.
He said the capital expenditure as a percentage of GDP which was languishing has doubled in the past three years.
Chairman of Central Board of Direct Taxes J B Mohapatra, Chairman, Central Board of Direct Taxes, (CBDT), Ministry of Finance; said the Finance Bill mainly focuses on the interest of taxpayers. Provisions have been inserted to cut down litigation. A new section 170 A has been added to make life easier for a restructured entity, approved through regulatory and NCLT routes.
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