Industry bodies emphasised on merging GST rates into three slabs and bringing all the items within the fold of the new indirect tax regime
In a pre-Budget consultative meeting with finance minister Arun Jaitley, industry representatives on Wednesday sought reduction in corporate tax rate to 25% as envisaged earlier, lowering of dividend distribution tax (DDT) and flexibility on fiscal deficit front to sustain productive spending. Among other suggestions, industry bodies emphasised on merging goods and services tax (GST) rates into three slabs and bringing all the items within the fold of the new indirect tax regime. Currently, petroleum products, potable alcohol, real estate and electricity are outside the GST’s ambit. They also sought simplification of a compliance mechanism, bringing clarity on anti-profiteering provision, and removal of GST on intra-entity transfer of services. There is a need to exempt levy of minimum alternate tax (MAT) on write-back of notional income pursuant to approved plan of Insolvency and Bankruptcy Code (IBC), said Ficci president Pankaj R Patel. “Together with the basic corporate income tax, this pushes India’s overall tax rate for companies well beyond 40%, which is quite high,” he added. In the FY18 Budget, the government cut tax rate to 25% from 30% for smaller companies with annual turnover up to `50 crore in the year 2015-16 and thereafter, to make them competitive and shift to a company format.