Cut in corporate tax to make India more competitive: Revenue Secy

BQ: When you reduce the corporate tax rates, the promoter does not take away all money, the money remains with the company. If money remains with the company then it enables the company to invest more and create more jobs — Shaktikanta Das, revenue secretary

Tribune News Service

New Delhi, March 3

Revenue Secretary Shaktikanta Das today said reduction in corporate tax rate will make India more competitive, and enable companies to invest more and create more jobs.

“My sincere reply to such critics is that when you reduce the corporate tax rates, the promoter does not take away all money, the money remains with the company. The company is a legal person. If money remains with the company then it enables the company to invest more and create more jobs," Das said at an event organised by industry body CII.

The Revenue Secretary said "our present corporate tax rate is not competitive" and corporates have choice to go to countries like Thailand and Indonesia.

Reiterating the commitment of the Government towards bringing forth a non-adversarial and hassle-free tax regime, Das elaborated on the various provisions in the Budget aimed at minimising the discretionary powers of the tax authorities and promoting the ease of doing business.

Stressing the need for creating a conducive investment climate for both domestic and foreign stakeholders and reducing the scope of litigations, the Budget has taken various steps like phased reduction of corporate tax rates while spelling out phased elimination of exemptions, increasing the rate of service tax and putting in place a roadmap for smooth transition to GST.

Speaking on the issue of black money, Das said while there are sufficient provisions in place to deal with the issue of black money, it is the implementation which needs attention and the Budget has taken steps in this direction.

On the proposal of raising service tax from 12.36% to 14%, Das said," It was a necessary measure in our movement towards Goods and Services Tax (GST)."

On retrospective amendment, the Finance Secretary said, "If we look at General Anti Avoidance Rules (GAAR) also there was an element of retrospectivity in GAAR, it was supposed to be applicable on all transactions after 2010, now the Finance Minister has announced it will be applicable on transactions on or after April 1, 2017”.