In a major fiscal booster, the Finance Minister has slashed effective corporate tax to 25.17 percent inclusive of all cess and surcharges for domestic firms. Union Minister Nitin Gadkari who has always been appreciative of the FM's decisions hailed this move.

Extolling the decision by the Finance Minister Gadkari said that this announcement will work as a 'Growth Engine'. The new tax rate will be applicable from the current fiscal which began on April 1.

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Nitin Gadkari heaping praises over FM's fiscal booster decision

Terming the decision of slashing down the corporate tax 'Historic', Gadkari further stated, "This will increase the confidence of investors and industry and it will prove very important in realizing the 5 trillion economies." 

Sitharaman said the revenue foregone on reduction in corporate tax and other relief measures would be Rs 1.45 lakh crore annually. This, she said, is being done to promote investment and growth. In effect, the corporate tax rate will be 22 per cent for domestic companies if they do not avail of any incentive or concession. The changes in the Income Tax Act and Finance Act will be made effective through an ordinance.

Gadkari also said that better results would come from this decision.

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Society of Indian Automobile Manufacturers (SIAM) lauds the move

The SIAM President Rajan Wadhera said the reduction in corporate tax rate and other announcements made by Finance Minister Nirmala Sitharaman would help give a boost to local manufacturing in the sector.

Wadhera said in a statement said that "The reduction of corporate tax to 15 per cent for new companies making fresh investments from October 1, 2019, will support investment and also FDI in the auto sector. This is expected to give a big boost to Make in India for the automobile industry."

Expansion of scope of CSR (corporate social responsibility) expenditure to include incubation centres and R&D activities will also help with expenditure in the automobile sector, he added.

"All these set of fiscal measures are expected to uplift market sentiments and improve demand for automobiles," Wadhera said

READ | Corporate tax slashed down to 25.17 pc for domestic companies

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(With Inputs from PTI)