Lowering of corporate tax rates to boost investments in U'khand: Rawat

The central government's decision to lower corporate tax rates will give impetus to industrial investments in Uttarakhand, Chief Minister Trivendra Singh Rawat said on Wednesday.

Speaking at a press conference here on impactof the Centre's decision to lower corporate tax rates, Rawat said Uttarakhand will directly benefit from the move as it will speed up industrial investments in the state.

"The tax concessions being given by the Centre will further boost investments in the state," he said.

On September 20, Finance Minister Nirmala Sitharaman announced to cut the basic corporate tax rate for domestic companies to 22 per cent from 30 per cent. The effective tax rate for domestic companies was reduced to 25.17 per cent from 34.94 per cent inclusive of surcharge and cess.

 

Also, new manufacturing companies starting production on or before March 31, 2023 and incorporated on or after October 1, 2019 will have an option to pay tax at a lower rate of 15 per cent if they do not avail any exemption/incentive.

The effective tax rate for such companies will be 17.01 per cent, inclusive of surcharge and cess.

The Uttarakhand government formed a new industrial policy and amended five other related policies last year to create a conducive atmosphere for investment which has brought investments worth over Rs 17,000 crore to the state in a short span of less than a year, Rawat said.

As per the new tax rates, industries availing benefits of state government sponsored schemeswill have to pay tax at the rate of 16 per cent instead of25 per cent, whereas those expanding their units will have to pay taxes at the rate of 15 per centin place of 18.5 per cent, he said.

The Centre's decision has also generated enthusiasm among foreign investors about India as the move is being seen as being capable of facilitating the country's speedy exit from global economic slowdown, he said.

The recentmeasures have strengthened the possibilities of investments in Uttarkhand in MSME, pharma, automobile and infrastructure sectors, he said.

The amendment in tax rates will also benefit tourism sector in Uttarkhand, the mainstay of its economy, the chief minister said.

Industry experts feel tourism sector in Uttarakhand,which has 1,600 registered hotels,is likely to grow at a rate of 15-20 per cent per annum, Rawat said.

The state will also benefit from lowering of tax rates on electricity driven vehicles from 12 per cent to 5 per cent, he added.