The government on Tuesday said corporate tax rates can be cut to 25 per cent from 30 per cent if the goods and services tax (GST) collections improve, but wanted the firms to pass on the benefit of lower GST rates to the consumers.
"The Finance Minister has promised to look at the income tax rates for the corporate sector and lower them once the GST collections improve," Sandip Somany, President, Federation of Indian Chambers of Commerce and Industry (FICCI), told reporters.
Somany, who led the FICCI delegation that met the Finance Minister on Tuesday, made a presentation to Arun Jaitley and other senior officials on the important sectors that the industry body believe should be the focus areas for the next government, as and when it comes to power.
Quoting Jaitley, Somany said the cut in corporate tax rates to 25 per cent from 30 per cent will be progressive. As GST collections go up, tax rates could be reduced. A rationalisation of the corporate tax rate will make the Indian corporate sector globally competitive, he said.
Jaitley said the government is committed to facilitate trade and industry to let the momentum of the growth continue, the Finance Ministry said in a statement.
Suggesting that the GST is now on track and is in the process of settling down, he asked industrialists to pass on the benefits of reductions in GST to the consumers at large.
Jaitley said the process of reforms with regard to direct and indirect taxes will continue to facilitate and expedite the process of ease of doing business.
He said the government's thrust is to lower tax rate and widen tax base and keep the revenue collections moving up. He said indirect tax collections will further increase.
"The government is committed to keep this growth momentum high and inclusive to ensure that benefits of growth reach all sections of the society, especially the vulnerable and weaker sections," the Finance Ministry statement said.
After presenting its report "Agenda for Growth and Shared Prosperity" to the Finance Minister, FICCI highlighted five areas -- agriculture, MSMEs, external trade, digital economy, human capital and productivity -- for the government in the next five years.
"We submitted FICCI's agenda for growth and inclusiveness for the next government. The concept paper was prepared by FICCI. After the presentation, we discussed several subjects with the Finance Minister, including further growth, taxation, GST revenues, employment generation and social sector schemes," Somany said.
While the industrialists are concerned about the liquidity crunch and the time it would take to resolve, Somany said the Reserve Bank of India (RBI) is likely to pump in more money to ease the situation, mainly for the non-banking financial companies (NBFCs).
"It depends on how much money the RBI puts into the market. The RBI Governor is responsive and is aware of the problems. I am sure he is doing his best to sort out the issues at the earliest," Somany said.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)