“At no point and on no score, do we want to make it difficult for industry,” stated Ms. Nirmala Sitharaman, Minister of Finance and Corporate Affairs, Government of India, at the CII National Council Session in Delhi. Taxation, infrastructure, RBI-government relations, delayed payments and corporate social responsibility (CSR) were amongst the key themes she addressed.
“It is our intent to reduce tax on corporates”, said Ms. Nirmala Sitharaman, emphasising that there was “no second thought” on this matter. The government would consider a uniform 25% tax rate for all categories of corporates after there was comfort that tax revenues were on the upward trend.
Ms. Sitharaman also touched upon two other elements relating to taxation: simplification and harassment. “We are looking at simplification of taxes”, said Ms. Sitharaman adding that the report of the committee on Direct Taxes Code is expected to be released on 15 August. The government will immediately take this up for consideration.
Ms. Sitharaman also informed the CII members present that she will be travelling around the country, including to tier 2 cities, to first-hand hear and understand the tax harassment issues faced by corporates. In addition, a technology driven platform will be set up wherein cases of harassment can be uploaded, either with and without disclosing identity. Ms. Sitharaman stated her intent to address the issues relating to harassment and ensure powers are not misused.
Ms. Sitharaman mentioned the possibility of reviewing some of the milestones in relation to infrastructure. In particular, projects with a bearing on the core sectors and job creation may be brought forward. For instance, incentivising affordable housing is likely given its impact on the core sectors.
“We have an atmosphere of certainty and cordiality between the RBI and the government”, said Ms. Sitharaman, adding that the current high level of synergy between the two is helping to incentivise investments.
Recognising that corporates have significant outstandings from government departments and agencies, Ms. Sitharaman stated that she is in the process of addressing this. Delayed payments to MSMEs is estimated at around Rs 48,000 crore. As the first step, out of the Rs 48,000 crore, the government will be releasing amounts which are not under litigation.
On the matter of CSR, Ms. Sitharaman mentioned that she would review the provision on criminal penal provisions. She said CSR notices with retrospective effect “were unacceptable” and she will put a stop to these notices.
Mr. Uday Kotak, President Designate, CII appreciated the frank and open comments made by Ms. Sitharaman. He stated that she had “won the heart of Indian industry” by her acknowledgement of Indian Inc. as India’s wealth creators. He requested that the government take bold decisions to catalyse growth.
In closing, Mr. Chandrajit Banerjee, President CII, thanked Ms. Sitharaman for addressing CII and taking suggestions from CII members.
9 August 2019