New Delhi, December 6: At the pre-budget meeting convened by Finance Minister Arun Jaitley on Wednesday industry bodies have sought a reduction in the corporate tax rate as well as incentives for attracting fresh investments. They have suggested lowering the corporate tax to 18-25 per cent from up to 30 per cent at present.
Exporters, who are grappling with blockage of working capital, sought exemption from tax on export income, lower rates on forex earnings and faster clearance of GST refunds.
"Finance minister has promised 25 per cent corporate tax rate long back and we expect that he will fulfil his promise in this budget," Ficci President Pankaj Patel told PTI. Jaitley is likely to present Union Budget 2018-19 on February 1.
It will be the first full-fiscal budget after the implementation of the Goods and Services Tax on July 1 this year. It is also likely to be the last one of the current government before elections in 2019, when the customary vote- on-account will be presented.
Patel said the industry body also sought government support for innovation, employment generation through investment in MSME and startups sector, specific incentives for new investments and highlighted the need to establish an export zone having manufacturing facilities but without any taxes or regulations. "We have asked it to reduce the corporate taxes.
Across the world people are reducing the corporate taxes and India is among the highest. We do need to create more demand and capacities for private investment and if you see today GST has increased the tax rates," CII President Shobhana Kamineni said.
CII also suggested that the road map should include reducing the corporate tax rate to 18% (all inclusive) at the earliest with withdrawal of tax incentives and exemptions and withdrawal of surcharges and cesses.
"The implementation (of GST) and refund delays are a cause of concern so we have suggested that if they can give us the IGST refund also along with the drawback. In the US, there is a differential tax rate for export earnings, so we have sought a lower rate of tax on export earnings than the normal corporate rates," EEPC India's past chairman P K Shah said.
According to Shah, refunds of exporters to the tune of at least Rs 60,000-70,000 crore are stuck post GST roll out in July.
Assocham President Sandeep Jajodia said the industry body has sought that the corporate tax be reduced to 25 per cent, in line with developed and industrialised nations, as it will help attract investments and create jobs. "Dividend distribution tax, which is around 20 per cent, should also be lesser," he said.
P R Aqueel Ahmed, vice chairman of the council for leather exports, said: "We have requested for reduction in the direct taxes and a scheme to boost women employment and expediting the refunds under GST as they have been delayed."