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Auto industry body SIAM on Friday said the reduction in the corporate tax rate and other announcements made by Finance Minister Nirmala Sitharaman would help give a boost to local manufacturing in the sector.
The government slashed the effective corporate tax to 25.17 per cent, inclusive of all cess and surcharges for domestic companies. Making the announcement, Sitharaman said the new tax rate will be applicable from the current fiscal, which began on April 1.
“The reduction of the corporate tax to 15 per cent for new companies making fresh investments from October 1, 2019, will support investment and also FDI in the auto sector. This is expected to give a big boost to Make in India for the automobile industry,” the Society of Indian Automobile Manufacturers (SIAM) President, Rajan Wadhera, said in a statement.
Expansion of the scope of CSR (corporate social responsibility) expenditure to include incubation centres and R&D activities would also help with expenditure in the automobile sector, he added.
“All these set-off fiscal measures are expected to uplift market sentiments and improve demand for automobiles,” Wadhera said.
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