FICCI President Pankaj R. Patel said at the pre-budget meeting with the industry, convened by the finance ministry, this move will help in retaining India’s overall competitive environment globally.
FICCI stressed that many key global economies were opting for significant rate cuts for instance, the US is on the verge of historic tax reform that proposes to cut the corporate tax rate from a top rate of 35% to 20% as well as provide relief to individuals and this approach should also be followed by India.
Although a roadmap for bringing down corporate tax rates to 25% was laid out in earlier budget, this is not yet implemented across the board. FICCI president also stressed on the need to consider the impact of the Dividend Distribution Tax and the Buyback Tax.
“Together with the basic corporate income tax, this pushes India’s overall tax rate for companies well beyond 40%, which is quite high,” he said. FICCI at the meeting, also attended by senior finance ministry officials, includes convergence of the Goods and Services Tax (GST) rates to 3 – 4 and inclusion of all excluded items till date, along with simplification of the compliance mechanism and removal of the applicability of GST on Intra-entity transfer of services within the same legal entity.
FICCI also pointed out that there is a need for clarity on Anti-profiteering provisions under GST, specifically related to its applicability at product or entity level, examination at State or Central level, applicability on products/stocks prior to GST, etc. Such clarity is important as there can be penal consequences if the taxpayer is found not complying with these obligations. Furthermore, the taxpayer should not be made liable to follow such guidelines retrospectively.