JAMMU: The recent decision of Union Finance Ministry regarding the cut in Corporate Tax rate on domestic companies from 30 to 22 per cent to stimulate economic growth from the recent slowdown speaks of the commitment of Narendra Modi government to boost the country’s economy. It will have direct impact on UT of Jammu Kashmir. This was stated by former Deputy Chief Minister Kavinder Gupta, while addressing media persons at party office, who termed the decision as a bold step by way of which the domestic companies will get additional profits, thus enabling them to invest more. He said after 31st October when, the State shall be converted to two Union Territories, many investors shall come forward for the investment in manufacturing and tourism industries.
Declaring that the said tax reform would be implemented from October 1st this year, Kavinder said that the decision to cut the Corporate Tax rate will boost corporate profit growth, kick-start private investment cycle, make the nation more competitive investment destination. Lower corporate tax will lead to earning benefit of 11-12 percent for capital goods, metals, banks, automobiles and consumer durables, Gupta added. Due to prevailing slowdown, the spectre of job losses was gradually expanding from the beleaguered automobiles to consumer products, thus limiting job opportunities.
The reduction in corporate taxes and the resultant gains in profits for companies that fall in the requisite tax bracket shall be a good factor on jobs front. He said the decision of reduction in the taxes would result into higher cash flows which could be used by these companies for debt reduction and capex funding. Reduction in GST rate slabs, increase of depreciation percentage on commercial vehicles from 30 to 45 percent, reduction of GST rate on Electric Vehicles from 12 to 5 percent, exemption of GST on warehousing of cereals, pulses, fruits, nuts & vegetables etc. shall bring good results.
Kavinder Gupta said that Banks merger was also a step taken to strengthen the banks for which government has made a provision of 5 lakh croes and 70,000 crores have already been advanced to banks to further lend to the genuine loan seekers. Repo rates have also been reduced, resultant of less EMI’s on housing, vehicle and other loans. To avoid any harassment by banks the government has taken a decision not to declare any NPA upto 31st March, 2020. Kavinder Gupta was flanked by Balbir Ram Rattan, Tilak Raj Gupta and Kulbhushan Mohtra.