How India Inc reacted to FM Nirmala Sitharaman's announcement on corporate tax, MAT rate cuts

New Delhi: India Inc gave a big thumbs up to Finance Minister Nirmala Sitharaman's announcement on corporate tax and MAT rates reduction.

The Finance Ministry on Friday announced that corporate tax rates will be slashed to 22 percent for domestic companies and 15 percent for new domestic manufacturing companies.

Here's how India Inc reacted to FM Sitharaman's announcement on corporate tax, MAT rates reduction.

"Corporate Tax Rate Cut From 30% To 25.2% To Spur Growth- this is a great move which will firmly revive growth n investment. My hats off to FM ⁦@nsitharaman⁩ for this bold but most needed move," wrote  Kiran Mazumdar Shaw, Chairperson and Managing Director of Biocon.

Corporate Tax Rate Cut From 30% To 25.2% To Spur Growth- this is a great move which will firmly revive growth n investment. My hats off to FM ⁦@nsitharaman⁩ for this bold but most needed move. https://t.co/yhvJ9IcMmm

— Kiran Mazumdar Shaw (@kiranshaw) September 20, 2019

Confederation of Indian Industry wrote, "CII is truly heartened by Hon. @nsitharaman announcements fm Goa. Reduction in #Corporatetax rate has been a long-standing demand fm industry as high rates were making Indian industry uncompetitive vis-à-vis its peers~Chandrajit Banerjee, DG, CII @PMOIndia @FinMinIndia @PIB_India".

CII is truly heartened by Hon. @nsitharaman announcements fm Goa. Reduction in #Corporatetax rate has been a long-standing demand fm industry as high rates were making Indian industry uncompetitive vis-à-vis its peers~Chandrajit Banerjee, DG, CII @PMOIndia @FinMinIndia @PIB_India

— Confederation of Indian Industry (@FollowCII) September 20, 2019

"The tax reliefs announced by FM Ms @nsitharaman will certainly prove to be a much-needed booster dose in tackling the current slowdown & regaining the growth momentum. Lowering of income tax on corporates is a longstanding FICCI request: Mr Sandip Somany, President, @ficci_india"Federation of Indian Chambers of Commerce & Industry tweeted.

The tax reliefs announced by FM Ms @nsitharaman will certainly prove to be a much-needed booster dose in tackling the current slowdown & regaining the growth momentum. Lowering of income tax on corporates is a longstanding FICCI request: Mr Sandip Somany, President, @ficci_india. pic.twitter.com/r5VFvlG0r5

— FICCI (@ficci_india) September 20, 2019

"Reducing corporate tax rate to 25% is big bang reform. Allows Indian companies to compete with lower tax jurisdictions like the U.S.  It signals that our government is committed to economic growth and supports legitimate tax abiding companies.A bold, progressive step forward," Uday Kotak, CEO, Kotak Mahindra Bank tweeted.

Reducing corporate tax rate to 25% is big bang reform. Allows Indian companies to compete with lower tax jurisdictions like the U.S. It signals that our government is committed to economic growth and supports legitimate tax abiding companies.A bold, progressive step forward.

— Uday Kotak (@udaykotak) September 20, 2019

The total revenue foregone for the reduction in corporate tax rate and other relief estimated at Rs 1,45,000 crore.

“In order to promote growth and investment, a new provision has been inserted in the Income-tax Act with effect from FY 2019-20 which allows any domestic company an option to pay income-tax at the rate of 22% subject to condition that they will not avail any exemption/incentive. The effective tax rate for these companies shall be 25.17% inclusive of surcharge & cess. Also, such companies shall not be required to pay Minimum Alternate Tax,” an official release said.

Significant cut in corporate tax for domestic firms will accelerate the investments in manufacturing, open up new employment opportunities and kick start economic growth trajectory of the country, said the industry body PHD Chamber of Commerce and Industry in a press statement issued here today.

A reduction in the Corporate Tax will strengthen India’s position among the competitive economies in the manufacturing sector such as China, United States, Germany, Japan, South Korea, Mexico and Canada, among others, said Mr Rajeev Talwar, President, PHD Chamber of Commerce and Industry.

Toyota Kirloskar Motor said that this is a welcome structural change and comes as a great respite to corporates. This positive move from the Government of India will lead to further investments in the country as well as create more business opportunities. The ‘Make in India’ initiative will thus get a further impetus.

As far as automotive sector is concerned, we believe that on a mid to long term basis, the government should consider the merits of moving towards a carbon (fuel efficiency)-based GST taxation policy which will not only lead to huge fossil fuel savings but will also help in lowering emissions.