Comments
The Finance Ministry is working on a proposal to reduce the incidence of withholding tax on external commercial borrowings (ECBs) to encourage Indian companies raise funds from overseas markets.
“We are trying to work out a mechanism to bring down withholding tax for all ECB and long-term infrastructure corporate bonds,” a senior Finance Ministry official said. Withholding tax is the tax deducted at source on payment made to non-residents and it is the responsibility of the payer to deposit the same with the Government.
The former Finance Minister, Mr Pranab Mukherjee, in his Budget for 2012-13 in May had proposed to slash withholding tax from 20 per cent to 5 per cent across the board for all businesses.
“To further facilitate access to such borrowings, I propose to extend the lower rate of withholding tax to all businesses,” Mr Mukherjee had said.
To help the cash-starved sectors, Mr Mukherjee had opened access to ECBs to sectors like aviation, which can raise overseas funds for working capital for a period of one year under the sectoral ceiling of $1 billion.
Sectors such as affordable housing, power (refinancing of rupee loans) and road (for maintenance of toll roads) were also given access to overseas loans in the Budget
Comments
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.