In a attempt to boost the ailing Indian Economy, the Finance Ministry has amended the Taxation Laws Bill, cutting the corporate tax to 15% for specific industries.
In the latest developments, the amended bill tabled in the Lok Sabha clarifies that only new companies that are involved in mainstream manufacturing will be applicable to enjoy a lower corporate tax rate of 15 percent.
The new rate won’t be applicable for firms that develop software, are involved in mining, convert marble blocks into slabs, bottle gas into cylinders, print books and produce cinematograph films.
The amended bill adds that a manufacturing company registered after Oct 1, 2019 and begins manufacturing by March 31, 2023 is applicable to reap the benefits of slashed corporate tax.
Moreover, it has to be noted that the new tax rates announced by the ministry back in September are headline rates and not effective rates thus don’t include surcharge and cess.
The arrival of the new tax rates is among one of the many schemes of the government that it thinks will help boost the economy by pushing the manfacturinfg sector. The manufacturing push will certainly help Make in India initiative prosper and will also generate jobs.
However, to curb companies from availing 15% corporate tax by flawed tactics like creating a new firm by transferring existing assets, the ministry has said that any such company will not be exempted from the regular corporate tax rates.