FinMin seeks suggestions for rationalising I-T, duties

New Delhi, November 13

In perhaps the first instance, the Finance Ministry has kicked off the exercise to formulate the next Budget by seeking suggestions on changes in direct and indirect taxes from industry and trade associations.

Finance Minister Nirmala Sitharaman, who had to announce additional measures to stimulate a slowing economy within a month of her maiden Budget being approved by Parliament, is due to present the annual Budget for the financial year 2020-21 on February 1. While the ministry holds pre-Budget consultations with representatives of different sectors and stakeholders, the Department of Revenue in the Finance Ministry perhaps for the first time put out circular seeking suggestions for changes in income tax rates for both individuals and corporates as well as in indirect taxes such as excise and customs duty.

The November 11 circular asked industry and trade associations to give “suggestions for changes in the duty structure, rates and broadening of tax base on both direct and indirect taxes giving economic justification for the same.” “Your suggestions and views may be supplemented and justified by relevant statistical information about the production, prices, revenue implication of the changes suggested and any other information to support your proposal,” it said.

After her maiden Budget on July 5, Sitharaman on September 20 announced a cut in corporate income taxes for domestic companies to 22% from 30% previously. This would bring effective corporate tax rate, including all additional levies, to about 25.2%, for companies which are not receiving any incentives or exemptions.

New manufacturing companies formed after October 1 will enjoy a 15% (effective rate of 17%) corporate income tax rate, against 25% previously. — PTI

Kicks off exercise to formulate Budget

• Finance Minister Nirmala Sitharaman is due to present the annual Budget for the financial year 2020-21 on February 1
• The Finance Ministry, perhaps for the first time, put out circular seeking suggestions for changes in income tax rates for both individuals and corporates as well as in indirect taxes such as excise and customs duty