Ahead of the Union Budget, FMCG major Hindustan Unilever CMD Sanjiv Mehta Thursday pitched for reducing corporate tax rate and redressal of technical glitches and procedural matters of the goods and services tax (GST).
He said that the taxation burden for multi-national corporations (MNCs) can be reduced by "bringing down their corporate tax rate at par with the rate applicable in neighbouring countries".
While GST has proven to be a game changer and is positively impacting taxation practices, "transitional issues need to be rectified fast, covering both technical glitches and procedural matters," he added.
He was speaking at CII's national conference on 'MNCs and India: Creating Mutual Value'.
In February this year, Finance Minister Arun Jaitley lowered corporate tax rate to 25 per cent for businesses with turnover up to Rs 2.5 billion. However, for businesses with over Rs 2.5 billion turnover, 30 per cent tax remains.
The minister will present the interim Budget for 2019-20 financial year on February 1, 2019.
Mehta, who is also Chairman of CII National Committee on MNCs, said that restrictions on the royalties paid by Indian subsidiaries to their parent companies has been a major concern for MNCs in the recent times.
Market regulator Securities and Exchange Board of India (Sebi) has reduced the royalty payment to 2 per cent on listed companies, which is adversely affecting sentiments of Indian subsidiaries to list in the country's stock exchanges, he said.
"The distinction created between listed and unlisted companies can discourage participation by foreign companies in the country, thereby adversely affecting transfer of advanced technology, research and development in India by the foreign companies," he added.
"Certain restrictive clauses like sourcing norms have undermined the realisation of full benefits of the measure," Mehta said, adding that there was a need for harmonisation of Indian standards in line with the global standards when it comes to the regulatory and policy environment in the context of MNCs.
Talking about intellectual property rights (IPR), he said, issues are being faced in the form of inadequate effective enforcement mechanism of rules and limited resources are leading to rising application backlog.
He said that India remains high on the global business radar and it is the right time for India to leverage upon it through a stable and progressive business environment.
"India has the potential to be the engine of growth for the global economy for years to come. If we maintain the momentum, we could be a $6-7 trillion economy by 2030, and if we bend the curve we could be a $10 trillion economy by 2030," he added.