New Delhi: After a further improvement in the goods and services tax (GST) collection, the Union government would reduce the rate of corporate tax to 25% for all major companies, industry secretary of FICCI Sandeep Somani said on Tuesday.
Somani told reporters after meeting Union Finance Minister Arun Jaitley that there had been a discussion on various issues including taxation, employment generation and industrial production with Jaitley.
FICCI notices increasing ease of doing business
The government had announced in the Budget of 2015-16 that the rate of corporate tax would be gradually reduced from 30% to 25% over the next four years.
In Budget 2017, the government reduced the rate of corporate tax to 25% for companies whose business was less than worth Rs 50 crore in the financial year 2015-16. This step benefited small and medium enterprises.
After this, the government reduced the corporate tax to 25% for companies doing business up to Rs 250 crore in 2018-19 Budget. After this, only 7,000 companies out of 7 lakh companies filing income-tax returns remain within the 30% tax bracket.
Asked about the withdrawal of the duty exemption of Indian products under the General Preferential Arrangement (GSP), Somani said this would affect the competitiveness of the Indian industry.
The industry secretary of FICCI said he was confident that the government would take appropriate action and the preferential exemption granted to India should not be withdrawn, for which both Indian and American governments should talk.
US President Donald Trump has expressed the intention of ending the exemption given to India and Turkey under preferential trade arrangements. He has said that India and Turkey have failed to reassure the United States of providing an ‘equitable and fair access’ to their markets.
On Tuesday, Donald Trump criticised the high import duty on many American products in India. Saying that India was imposing a very high rate of interest, Trump said that America would reciprocate by imposing similar charges on Indian products.
In a letter to the parliamentary leader, Trump said, “I am taking this step because after the deep engagement between the United States and India, I have realised that India has not given the United States the assurance that American goods will be available in Indian markets with equal and fair access.”