Corporate tax rate cut impact to be visible in two years: CII chief
New Delhi: The revised corporate tax rates are competitive and its impact will be visible in the next two years, industry body CII's President Vikram Kirloskar said on Tuesday as he emphasised that the government listened to the industry "word by word" on lowering rates. He said the industry pushed the government a lot for reducing the rates.
"For me, it was a surprise (when the government in September announced the significant cut in tax). I felt really good. I felt that they have listened to us. Very frankly and they listened 'word to word'," Kirloskar said.
He spoke to PTI after a pre-Budget meeting with Finance Minister Nirmala Sitharaman that was attended by him and representatives of other industry organisations. When asked if the industry was looking for further reduction in tax rates, he replied in the negative.
"No. I think it is competitive. I know people who are looking at investing either in Thailand, Indonesia, or India have now got India back in the game. I think you will see the results in next two years,"
In a major fiscal booster, the government, in September, slashed effective corporate tax to 22 per cent for domestic companies.
Also, companies opting for 22 per cent income tax slab would not have to pay Minimum Alternate Tax (MAT) and new domestic manufacturing companies incorporated after October 1, can pay income tax at a rate of 15 per cent without any incentives.
However, companies are facing a dilemma that if they opt for the lower tax rate, they would have to forego accumulated MAT credits.
"I think they (the government) have done it very wisely by saying you have an option of X or Y. Because when we pushed for lowering rates, one of the issues was that there are people with (MAT) credits available," he said.