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Ahead of the Union Budget 2016-17, Finance Minister Arun Jaitley on Wednesday said tax rates have to be kept reasonable and reviewed at times to keep the manufacturing sector competitive.
“...we have to keep our rates competitive and therefore, vary them occasionally,” he said at the Central Excise Day and Investiture ceremony.
Noting that manufacturing has a very vital role in a developing economy, he further said, “Manufacturing itself is not only extremely important activity, but it is one activity with a spiral effect on the economy which also creates the largest volumes of job.”
Signs of revival His comments come at a time when the manufacturing sector is showing incipient signs of a turnaround. According to advance estimates by the Central Statistics Office, manufacturing growth for 2015-16 is likely to be at 9.5 per cent as against 5.5 per cent growth in 2014-15.
The Minister is also looking at reducing the corporate tax rate to 25 per cent from the current 30 per cent over the next four years while winding up exemptions to India Inc. Simultaneously, as a precursor to the Goods and Services Tax, the Centre is also reviewing exemptions in Central excise.
Jaitley however, noted that the role of tax officials in such a scenario becomes important to ensure that the dues from each producer and manufacturer of the economy is realised.
“A tax on that manufacturing adds to the government revenue,” he said.
Make in India Addressing the event, Minister of State of Finance Jayant Sinha also underlined the importance of the manufacturing sector and the Centre’s Make in India campaign that will help revive economic growth and lead to job creation.
Rationalising duties “In this regard, the government has rationalised duties and levies have been reduced," he said but said policies also need to be implemented well.
Meanwhile, Najib Shah, Chairman, Central Board of Excise and Customs, expressed hope that the Centre will exceed the Budgeted target for central excise duty collections this fiscal.
As against the Budget target of ₹2.29 lakh crore from central excise receipts, the government has collected ₹2.24 lakh crore by January 31, he said.
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