NEW DELHI :
New mining companies, software producers, gas bottling plants and book printers will not be eligible for the 15% corporate tax rate that the government announced in September to new manufacturing companies, as per the bill on tax laws that finance minister Nirmala Sitharaman tabled in Lok Sabha on Monday.
The Taxation Laws (Amendment) Bill, 2019 that will replace the Ordinance promulgated in September offering corporate tax rate cuts also proposed that if a new manufacturing company failed to become eligible for the 15% corporate tax rate for not meeting a set of conditions, it could opt for the 22% tax rate that is available to domestic companies that do not take advantage of tax incentives. This brings flexibility to the options available to new companies.
Besides excluding software production, mining, conversion of marble blocks into slabs, gas bottling plants, book printing and production of cinematography film from 15% tax rate, the bill also empowers the government to exclude more business from this benefit through a notification. “The proposed changes bring clarity and seek to ensure the tax relief for new manufacturing companies is not misused," said Ved Jain, former president of Institute of Chartered Accountants of India (Icai).