Union Budget 2018: Big corporates cry foul over no tax relief

By: |
New Delhi | Published: February 2, 2018 5:34:15 PM

Budget 2018: With the Union Budget providing tax relief to MSMEs, corporates having turnover of over Rs 250 crore have expressed disappointment saying the move will make "India uncompetitive" and the government failed to keep its promise.

budget 2018, budget date, budget 2018 india, India budget, Union budget 2018, budget 2018 expectations, arun jaitley, arun jaitley budget, corporates, corporate taxBudget 2018: Finance Minister Arun Jaitley in the budget for 2018-19 announced lowering of corporate tax rate to 25 per cent for businesses with a turnover of up to Rs 250 crore. (Reuters)

Budget 2018: With the Union Budget providing tax relief to MSMEs, corporates having turnover of over Rs 250 crore have expressed disappointment saying the move will make “India uncompetitive” and the government failed to keep its promise. Finance Minister Arun Jaitley in the budget for 2018-19 announced lowering of corporate tax rate to 25 per cent for businesses with a turnover of up to Rs 250 crore.

However, for businesses having a turnover above Rs 250 crore, the 30 per cent corporate tax remains. Jaitley said the reduction in the corporate tax rate to 25 per cent “will benefit entire MSME sector which accounts for 99 per cent of companies filing taxes”. Speaking to PTI, Godrej Group Chairman Adi Godrej said: “Although 99 per cent of MSMEs pay their taxes, it, however, accounts for only about 1 per cent of the total corporate tax paid in the country.”

Income Tax Calculator: Find out how Budget 2018 will impact your finances

He further said the move will make India highly uncompetitive as countries like the US, the UK and China have reduced it to make a healthy investment climate. “The US and the UK have reduce corporate tax, China has reduced it to 25 per cent, so if India doesn’t do the same, it will make the country highly uncompetitive,” he added.

Watch: Union Budget 2018: Jaitley Recognises MSMEs As ‘Engine Of Growth, Employment’

Jaitley had promised in the 2015-16 budget that the corporate tax rate would be gradually lowered to 25 per cent from the current 30 per cent over the next four years. “On the business side, we were expecting a change in corporate taxation for big companies, however, that did not make the cut,” Shoppers Stop Ltd Managing Director and Customer Care Associate Govind Shrikhande said.

Read also: Budget 2018: FM Jaitley says mass MSMEs in for mass formalisation after GST, demonetisation

Experts said with the US substantially cutting corporate tax, it was expected that the finance minister will also follow them to remain globally competitive. “Its not that the economy runs only with the taxes paid by the MSMEs. In fact, the major contribution is from the tax paid by large corporates which the government failed to consider,” said an executive of a leading company on condition of anonymity. The NDA government yesterday unveiled its last full Budget before the general elections next year.

For latest coverage on Budget 2019-20 log on to financialexpress.com. We bring you full coverage of Union Budget 2019 Live. Stay Connected.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.