The Budget for 2015-16 is not “pro-rich” or “pro-corporates”, Shaktikanta Das, Revenue Secretary, has said.
The proposed cut in corporate tax rate by 5 percentage points over four years will not be beneficial to any class of people or investors, Das told a post-Budget meeting organised by the Confederation of Indian Industry here on Tuesday.
It will only expand the quantum of resources available at the corporates’ disposal, Das said.
This could help corporates invest more and create more jobs, he said.
The Budget had announced a plan to reduce the corporate tax as India’s rates were found to be “uncompetitive”, he said.
The rate reduction could help attract more investments into India, he added.
On critics’ contention that promoters’ could withdraw from the companies the gains arising from lower corporate tax payout, Das said “so be it”.
Even if this happens, it would only result in more tax payouts for the promoters, he added.
SERVICE TAX
Das said the Budget move to hike service tax from 12 per cent to 14 per cent was not a “revenue augmentation” measure.
It was done more as a preparation towards ushering in the goods and services tax (GST) regime, he said.
“It would be difficult to suddenly raise rates overnight. The States will also get to tax services under the GST regime,” Das said.
He also said service tax collections are currently “disproportionately low” given its contribution to the GDP of the country.