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NEW DELHI: The Ministry of Commerce proposes a tax holidays for companies that bring new investments As the government explores measures to support the economy amid the coronavirus pandemic, according to people familiar with the matter.
The finance ministry is evaluating the proposal to grant a total 10-year tax exemption to companies making new investments of more than $ 500 million, said the people, who asked not to be identified by citing rules. The plan requires companies to start operating within three years from June 1 and will cover sectors including medical devices, electronics, telecommunications equipment and capital goods, they said.
Another variant of the program will be to provide a four-year tax exemption to companies that invest $ 100 million or more in labor-intensive sectors such as textiles, food processing, leather, and footwear. A lower corporate tax rate of 10% is proposed for the next six years, the people said. The proposal must be approved by the finance ministry and, so far, it has not made a decision.
From offering easy access to land for factories leaving China to tax breaks for new plants, the Prime Minister Narendra ModiThe administration is trying to attract investors and prevent the coronavirus pandemic from destroying the economy.
Asia’s third-largest economy is moving toward its first full-year contraction in four decades, as India has failed to provide a big boost, given the government’s limited fiscal room, even when an estimated 122 million people They lost jobs in April and consumer demand. evaporated.
A call made to a spokesman for the commerce ministry was not answered while a spokesman for the finance ministry declined to comment.
More about Covid-19
The finance ministry is evaluating the proposal to grant a total 10-year tax exemption to companies making new investments of more than $ 500 million, said the people, who asked not to be identified by citing rules. The plan requires companies to start operating within three years from June 1 and will cover sectors including medical devices, electronics, telecommunications equipment and capital goods, they said.
Another variant of the program will be to provide a four-year tax exemption to companies that invest $ 100 million or more in labor-intensive sectors such as textiles, food processing, leather, and footwear. A lower corporate tax rate of 10% is proposed for the next six years, the people said. The proposal must be approved by the finance ministry and, so far, it has not made a decision.
From offering easy access to land for factories leaving China to tax breaks for new plants, the Prime Minister Narendra ModiThe administration is trying to attract investors and prevent the coronavirus pandemic from destroying the economy.
Asia’s third-largest economy is moving toward its first full-year contraction in four decades, as India has failed to provide a big boost, given the government’s limited fiscal room, even when an estimated 122 million people They lost jobs in April and consumer demand. evaporated.
A call made to a spokesman for the commerce ministry was not answered while a spokesman for the finance ministry declined to comment.
More about Covid-19
The benefits provided would be in addition to existing government-provided incentives, the people said.
The Ministry of Commerce has also identified the top 50 industry groups to upgrade its existing infrastructure, test labs, and research and development facilities. While the impetus is to develop sectors such as textiles, pharmaceuticals, food processing, and gems and jewelry, the ministry is also working to expand the list to include service sectors such as tourism, the people said.
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