Thread by @SandeepMall

Trying to understand all benefits to corporates announced yesterday. It is a great booster for Manufacturing Corporates. Tax rate shall be 22% + Surcharge, if they don’t avail exemptions & incentives.

• It’s a super bonanza for new companies to be incorporated after 01.10.2019 at only 15% tax (if they don’t avail exemptions & incentives)
• However, the relief in Corporate Income Tax is only for Companies, not individuals and firms or HUFs or AOPs.

• Companies with turnover less than 250 crore were already at 25%. So 3% relief for them.
• It leaves 97% MSMEs who work as Proprietorship/ Partnership/ HUF out of the new rate benefit, and they shall be continued to get taxed at existing applicable rates upto 30% + Surcharge

• Corporate Tax relief has certainly boosted the morale in no time and gave a high to the stock markets and investors there
• Results in actual investment/ Capex/ expansion / new projects in manufacturing may take some time, at least a few to 24 months.

Govt will certainly be poorer by Rs.1.45 lakh crore this year itself. It shall sure have negative impact in Government Investments, Infrastructure investments etc. Fiscal deficit shall certainly increase.

Since there is no relief on GST and ITax to the consumer, the revival of Automobiles inter linked sectors in the near future may not happen. So the investment in Capex in these sectors are not to happen in near future as there are huge spare capacities already in these sectors

Employment scenario may thus remain bleak till new projects/ expansions happen
Relief measures are mainly to boost the investment confidence of large corporates so that they have the extra money that they may save from Tax relief & then decide to invest in manufacturing in India