Finance Minister Nirmala Sitharaman on Friday morning held a Goods and Services Tax Council Meet in Panaji, (Goa) to discuss about enhancing domestic manufacturing and Make in India scheme.
During the press conference, Sitharaman proposed to slash corporate tax rate for domestic companies and new domestic manufacturing companies. She said that ordinance for cutting tax rate has been passed.
“We are adding a new provision to the income tax law to allow any domestic firm to pay income tax at 22 per cent subject to the condition that they won’t avail any incentives or exemptions,” said Sitharaman.
“There will be no minimum alternative tax (MAT) levied on them and the effective rate for such firms will be 25.17 per cent including all surcharges and cess,” she added.
She further proposed that, ” We will give MAT relief for those opting to continue paying surcharge and cess. MAT has been reduced to 15 percent from 18.5 percent for companies who continue to avail exemptions and incentives.”
Welcoming the measures announced by Sitharaman, RBI Governor Shaktikanta Das reportedly said, “This is definitely a bold and welcome measure. Highly positive for the economy.”