Crisil expects companies to save Rs. 37,000 crore in tax
In order to revive the struggling economy, the government has been taking every necessary steps and on 20th September 2019, the finance minister announced an unexpected cut in corporate tax rate that was slashed to 22 per cent without exemption and effective tax rate to 25.17 per cent. With this tax cut, the government estimates revenue loss of Rs. 1.45 lakh crore which would further widen the fiscal deficit.
Post this tax cut announcement by the government, credit rating agency, Crisil Research in its latest report has said that the move may help about 1,000 listed companies in the country to save at least Rs. 37,000 crore in taxes during current financial year.
The agency further noted that segments linked to the consumer would benefit the most, given higher effective tax rates of over 30 per cent, while export-linked sectors such as IT and pharma will benefit the least, accounting for only 5-6 per cent of potential savings. That’s because they already enjoy low effective tax rates. Besides, CRISIL added that this tax cut would also help in gaining traction for Make in India.
Besides, the government has also decided not to levy enhanced surcharge introduced in Budget 2019 on capital gains arising from the sale of equity shares in a company liable for securities transaction tax (STT). Also, in term of GST, the government has slashed GST rate on hotels. Earlier, the government has tried to revive stress sector like auto where it announced higher depreciation for vehicle and also government is expected to come up with new scrappage policy for vehicle.