The government may take steps to cut the corporate tax rate from 30 per cent to 25 per cent before the earlier indicated timeline of four years. By December, the Finance Ministry is also likely to outline a roadmap for phasing out of corporate tax exemptions, Revenue Secretary Hasmukh Adhia has indicated.
Finance Minister Arun Jaitley had in this year’s Budget announced that he would gradually pare the corporate tax rate from 30 per cent to 25 per cent over a period of four years and that various tax exemptions currently enjoyed by corporates would be phased out.
Jaitley had then said that the phased reduction would start in 2016-17. Currently, the effective tax rate for corporates is around 22 per cent.
The government is also preparing a separate roadmap to deal with existing litigation, Adhia told reporters on the sidelines of a conference, ‘Networking the Networks’, here.
The Finance Ministry may also look at revising upwards the threshold for an appeal before the income tax appellate tribunal. Meanwhile, Adhia clarified that the recently appointed panel under the chairmanship of retired Delhi High Court Judge RV Eswar would not look into issues related to retrospective taxation.
On the current tax disputes with Vodafone and Cairn, Adhia said that the government was not averse to an out-of-court settlement. “They had invoked arbitration and we had responded to it. And if there is an offer for an out-of-court settlement, the government will consider it,” he added.