FOR A LOSS RS.60,000 CRORES ANNUAL REVENUE, GOVT. COULDN’T REDUCE CORPORATE TAX FOR ALL, ADMITS FINANCE SECRETARYAT PHD CHAMBER

FOR A LOSS RS.60,000 CRORES ANNUAL REVENUE, GOVT. COULDN’T REDUCE CORPORATE TAX FOR ALL, ADMITS FINANCE SECRETARYAT PHD CHAMBER

FOR A LOSS RS.60,000 CRORES ANNUAL REVENUE, GOVT. COULDN’T REDUCE CORPORATE TAX FOR ALL, ADMITS FINANCE SECRETARYAT PHD CHAMBER

No.PR-152

February 6, 2018

New Delhi

 

FOR A LOSS RS.60,000 CRORES ANNUAL REVENUE, GOVT. COULDN’T REDUCE CORPORATE TAX FOR ALL, ADMITS FINANCE SECRETARYAT PHD CHAMBER

Secretary (Finance & Revenue), Dr. Hasmukh Adhia on Tuesday confessed that the government did not reduce corporate tax for all companies at 25% for fear of loosing a corporate annual tax revenues of Rs.60,000 crore and chose to keep it at 25% for companies with a annual turnover of Rs.250 crores in Budget proposals for 2018-19.

Addressing a Post Budget Interactive Session under aegis of PHD Chamber of Commerce and Industry here today, Dr. Adhia also ruled out extention of corporate tax rate of 25% given to MSMEs with a annual turnover of Rs.250 crores to partnership and LLP firms, emhasising that such firms already enjoyed certain avantages and, therefore, the government would want them to move on a corporate structure rather than according partnership and LLP firms benefits of reduced coporate tax.

The Finance Secretary was assertive and arculative arguing that the Long Term Capital Gains Tax proposed in the Budget Proposals for 2018-19 has shaken the Indian capital market as it was fully justified in the current Budget proposals and added emphasizing that the market shake up happened post Budget on account of global factors which shook global capital indices. 

To Justify his point, Dr. Adhia pointed out that between 2nd February and 5th February the global stock markets were affected between 3.8% to close to 6% in economies of scales whereas NIFTY and Sensex were respectively fell between 3.2% and 3.36% during the same period further adding that imposition of Long Term Capital Gains Tax cannot be related to disruption in Indian stocks. 

The Finance Secretary further argued that had LTCG had consequential impact on Indian stock markets, the country’s FIIs and FDIs flows since then would have turned adversial though the fact is both FIIs and FDIs continue to be inclined towards India.

Elaborating on the fact the government could not reduce Corporate Tax to 25% for all corporates, the Finance Secretary though admitted that it would have led to a revenue loss of Rs.60,000 crore per annum.  In addition, investment cycle would also have been adversely affected in the sense that the government gave lot of exemptions and incentives for uplift of rural economy as a result the additional demand, jobs, investment would acrue to corporates for enhancing consumption which the India Inc. woould realize incourse of time.

In his concluding remarks, the Finance Secretary lauded the role of PHD Chamber in its pre-Budget interface with the various functionaries of the Finance Ministry, reminding the audience “it was only this Chamber which did not seek tax exemptions and that largely emphasized on the revenue enhancement for the government through its benign tax policies”. 

In his welcome remarks, President, PHD Chamber, Mr. Anil Khaitan praised the Finance Ministry for presenting a Budget that would ultimately lead to higher demand, employment creation and consumption.

Amog others who were present in the Post Budget Interactive Session comprised Sr. Vice President and Vice President, Mr. Rajeev Talwar and Mr. D K Aggarwal including Chairmen, Direct and Indirect Taxes Committee of the Chamber, Mr. Anil K Chopra and Mr. Bimal Jain and its Secretary General, Mr. Saurabh Sanyal.

Ends.

Koteshwar Prasad Dobhal

Consultant (PR)