Budget 2017 shows the way for the future, in terms of how corporates can do business easily in the country, says Revenue Secretary Hasmukh Adhia. According to Adhia, Budget 2017 has made it very easy for new businesses to open up, by reducing the corporate tax rate to 25% for firms with a turnover of up to Rs 50 crore.
Speaking at a post-Budget 2017 session organised by FICCI, Adhia said, “The existing large corporates are asking why their tax rate has not come down. What you have to understand is that the cost of 1% reduction in corporate tax rate costs the government anywhere between Rs 18,000 crore to Rs 19,000 crore. That is a lot of money. We need to first expand the personal tax base to be able to provide that kind of relief,” he said.
Talking about the roadmap for implementation of the Goods and Services Tax (GST), Adhia expressed optimism that the government is on track to make the indirect tax reform a reality soon. “We are well on track for GST, nobody needs to worry about its implementation,” he said. “On February 18, we have the next meeting of the GST Council. We hope to finalise the law in that meeting,” he said, adding that the broad rates of GST have already been indicated and further calamity will emerge as the government moves forward on implementation.
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GST is being touted as the biggest indirect tax reform since Independence. With its implementation, India will have a system of ‘one country, one tax, one market’. Analysts widely expect that once GST comes into force, most of the services will get expensive, but for goods it will be a mixed bag. Essential goods will not form a part of GST.
FM Jaitley on February 1 presented the Union Budget for the fiscal year 2017-2018. The Budget largely focused on increased public expenditure, especially in the rural areas and on infrastructure. Industry analysts and markets have largely given a thumbs up to the Modi government for its Budget. The Union Budget was special this year, not only on account of the fact that it was preponed, but also for the government’s move to combine the Railway Budget as part of the main Budget.