New Delhi: There is good news for companies venturing into manufacturing sector. Actually, the Parliament has approved the Taxation Law Amendment Bill 2019. In this bill, a provision has been made to pay tax at the reduced rate of 15 per cent to companies entering manufacturing sector after October 1, 2019 and commencing production by 2023. However, the work of software development, mining companies and book printing will not be eligible for the reduced rate of manufacturing sector.
According to the Union Finance Minister Nirmala Sitharaman, computer software development whether in any form or in any media, mining, change in marble blocks, filling gas in cylinders, printing of books and cinematography produced film production Has been placed in the negative list. Companies entering these areas will not get the benefit of reduced tax rate. However, they will have an option to adopt a tax rate of 22 per cent.
Nirmala Sitharaman has said that companies which will not take any other exemption will be given the benefit of reduced tax rate. Similarly, in the manufacturing sector, it has been announced to give tax at the rate of just 15% to new companies coming after October 1. The effective rate of tax will be 25.2 per cent for companies falling under 22 per cent, including Cess, Surcharge and 17.01 per cent for new manufacturing units.