New Delhi, September 20: With Narendra Modi government reeling under the pressure to cope up the prevailing economic crisis and Foreign Portfolio Investments exodus, Union Finance Miniter Nirmala Sitharaman on Friday announced a slew of measures to bring back the economy on track. From slashing the corporate tax rates (CTR) for domestic companies and new domestic manufacturing companies to revising the Goos and Services Tax on products, she did everything possible in her hands.
Earlier on Friday morning, Sitharaman -- while addressing a press conference -- announced that the government would reduce the CTR on domestic companies from 30 percent to 22 percent. She also announced that the Union government would reduce the minimum alternate tax (MAT) for domestic companies by 3.5 percent, making it just 15 percent. Along with this, the tax rate for new domestic manufacturing companies will be 15 percent. GST Rates Revised: Hotel Stays Become Cheaper, Caffeinated Drinks Get Costlier; Here's The Complete List of New Tax Rates Announced by Nirmala Sitharaman After GST Council Meet in Goa.
Apart from this, she said that the decision is going to the cost the state exchequer a forego of Rs 1,45,000 crore. But she seemed confident that this would bring the limping economy back on the race track. She also opined that the decision was tough and expected that this would boost the FPI in the country, leading to improved Gross Domestic Product (GDP) figures.
Following the CTR, she chaired the 37th GST Council Meeting in Goa, where some of the landmark decisions were taken. The Union Finance Minister later in the evening -- informing about the revised GST rates -- stated that the hotel rooms will cost cheaper from now and while the compensation cess on diesel vehicles -- with 10-13 person capacity -- have been reduced to 3 percent. Also, for petrol vehicles, the cess was slashed to 1 percent. GST Council Approves Proposal to Hike Rates on Caffeinated Drinks; Soft Drinks, Energy Drinks And All Other Drinks Set to Become Expensive.
Also, the council decided a uniform GST of 12 percent for woven and non-woven polyethylene bags, approved the hiking tax rate on caffeinated drinks from 18 percent to 28 percent. Additionally, 12 percent of cess would also be charged under the new Goods and Services Tax (GST) rules. It even approved the waving off GST filing for dealers below 2 two crores turn over, while the state that the procedure for those with more than Rs 2 crore turnover would be simplified. What is Corporate Tax? Here's All About the Capital Tax and How it is Charged by Union Govt.
With rates of other products under the umbrella of GST revised and CTR slashed, economic experts are keeping a close eye at the market index -- whether it is climbing or trailing. However, the Sensex skyrocketed after months of trailing and was at 38014.62, with a gain of 1921.1 points. Even Nifty 50 gained 569.40 points and was at 11.274.20 at the market closing.