Tax Break To Benefit Only A Few Firms

The imposition of MAT had brought under the tax net as many as 1240 companies which were paying either zero or negligible tax. According to earlier calculations, these companies would have had to fork out Rs 1,893 crore by way of additional taxes. These estimates were based on their performances in 1995-96.

The financial data available for the year 1994-95 and 1995-96 shows that companies under the Sick Industrial Companies (Special Provisions) Act, 1985, have accumulated losses of over Rs 343 crore against a net worth of over Rs 196 crore. Thus with uncapitalised loss of Rs 147 crore suggest that the net worth of these companies have been wiped out and they are presumed to be sick industrial units.

 

Thus under the new MAT policy these companies would likely to save Rs 4.20 crore on net profit of Rs 32.60 crore reported for the year 1994-95 and 1995-96. Sri Vishnu Cement with uncapitalised loss of Rs 7.61 crore will benefit from the finance minister