In the midst of rising prices of petrol and diesel, the government has made it clear that there is currently no proposal to reduce tax on petroleum fuels. In response to a question in the Lok Sabha, Finance Minister Nirmala Sitharaman said on Monday that the prices of petrol and diesel do not remain stable in any country. He avoided giving any direct answer to the question of bringing petroleum fuels under the Goods and Services Tax (GST). The finance minister was asked whether the government was considering tax cuts to curb petrol and diesel prices. Apart from ruling out the possibility of tax cuts, the finance minister also clarified that the government is not even considering imposing any new tax on them. On the question of bringing petroleum fuels under the purview of GST, the Finance Minister said that technically, petrol and diesel are in zero rate slab of GST. Soon after, he also mentioned that any decision on this would be taken by the GST Council.
Amendment bill passed to reduce corporate tax
The Taxation Laws (Amendment) Bill, 2019 on reducing the rate of corporate tax has been passed by Lok Sabha after five hours of discussion on Monday. The bill would replace the ordinance that ordered a reduction in the rate of corporate tax. The ordinance was introduced in September 2019 to give a boost to the manufacturing sector in the country. Through this, it was announced to reduce the rate of corporate tax from 30 to 22 percent and for new manufacturing companies to 15 percent. Companies taking advantage of this will not get any other rebates. The Finance Minister said that the effective rate of corporate tax has now come down from 34.94 percent to 25.17 percent in India. For new manufacturing companies, the effective tax rate will be 17.16 percent.
There are signs of increasing investment:
During the discussion on the Bill, the Finance Minister said, “India is emerging as the most attractive manufacturing destination in the world with a reduced rate of corporate tax. There have been signs of increasing investment in the country after reducing the rate of corporate tax. Many companies have approached them that they are ready to manufacture in India. The finance minister also spoke about improving the economy. He said that good news has started coming from many fronts. The GST collection in November stood at over Rs 1.03 lakh crore. Direct tax collection has also increased by five percent.