Will consider corporation tax rate benefit extension: FM Sitharaman

Says GST rate reduction to go to Council; Council is likely to meet on Friday through video conferencing.

Finance Minister Nirmala Sitharaman said on Monday the government would consider an extension in the deadline for availing of the lower 15 per cent corporation tax rate on new investments. 

The concessional corporation tax rate against the existing 25-30 per cent is available for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023. 

“I will see what can be done. We want industry to benefit from the 15 per cent corporation tax rate on new investments and I take your point for considering an extension in the deadline of March 31, 2023,” Sitharaman said, addressing members of industry body Ficci.

The FM said demand for GST rate reductions would go to the GST Council, but the body of Union and state FMs is also looking at revenue. The decision for rate cut for any sector has to be taken by the Council, she said. The GST Council is likely to meet on Friday through video conferencing. 

The minister assured the industry of all possible support. Sitharaman clarified that the Covid-19 Emergency Credit Facility covers all companies and not just micro, small and medium enterprises (MSMEs).

In the biggest reduction in 28 years, the government in September slashed corporation tax rates by up to 10 percentage points to attract private investment and push sagging economic growth. Base corporation tax for existing companies was reduced to 22 per cent from 30 per cent, and to 15 per cent from 25 per cent for new manufacturing firms incorporated after October 1, 2019, and starting operations before March 31, 2023.

On the question of liquidity, she said: "We have fairly clearly addressed the issue of liquidity. There is definitely the availability of the liquidity. We will look into it if there are still issues." She also said every government department had been asked to clear dues and if there are any issues with any department, the government would look into them.

The minister suggested the industry to submit their recommendations related to the ministry of corporate affairs or Sebi deadlines, so that necessary steps could be taken.