Corporate tax cut to help top 1,000 firms save Rs 37K cr: Crisil | WeForNews | Latest News, Blogs Corporate tax cut to help top 1,000 firms save Rs 37K cr: Crisil – WeForNews | Latest News, Blogs
Connect with us

Business

Corporate tax cut to help top 1,000 firms save Rs 37K cr: Crisil

Published

on

New Delhi, Sep 22 : Around 1,000 companies would save nearly Rs 37,000 crore due to recent corporate tax rate cut, according to a Crisil report on Sunday.

A study of nearly 1,000 companies, spread across 80 sectors, which cover over 70 per cent of the National Stock Exchange’s market capitalisation indicates that effective tax rates had risen over the past five years.

These companies, including oil & gas and financial services, account for nearly one third of the tax paid by India Inc. “Our analysis indicates these companies could see tax savings of Rs 37,000 crore, or nearly a fourth of the total savings anticipated by the government,” the report by Crisil Research said.

Segments linked to consumer would benefit the most given higher effective tax rates of over 30 per cent, it said and added, exports-linked sectors, such as IT and pharma, on the other hand, would benefit the least, accounting for only 5-6 per cent of potential savings because they already enjoyed low effective tax rates.

Finance Minister Nirmala Sitharaman reduced the corporate tax on companies with a turnover of up to Rs 400 crore to 25 per cent in the Budget presented on July 5. This brought down the effective tax rate on over 99 per cent of companies to 27.8 per cent (corpoarte tax inclusive of surcharge and education cess).

For the rest less than 1 per cent, the effective rate remained at 34.94 (on 30 per cent corporate tax rate). This category of large turnover companies, such as Reliance Industries, Tatas, Aditya Birla Group, are the biggest beneficiary of Sitharaman’s latest tax breaks.

“Tax benefits will also vary within sub-segments. For instance, with the consumption space assessment of automobile manufacturers that account for 50 per cent of volumes sold indicates that tax cuts may have limited benefits because of already lower effective tax rates. But auto component manufacturers, which bear higher effective tax rates, may see maximum gains,” as per the analysis of 70 firms that account for 20 per cent of the market.

The Finance Minister on Friday announced Rs 1.45 lakh crore fiscal stimulus that includes slashing corporate tax to 22 per cent from 30 per cent, cutting down the minimum alternate tax (MAT) and lowering tax to 15 per cent for companies putting fresh capital into manufacturing.

The reduced corporate tax rate of 22 per cent would apply on domestic entities that don’t avail any exemptions and incentives. Also, these companies will not be required to pay any MAT. Effective tax rate in this case would be 25.17 per cent, including cess and surcharge.

Tax experts said reduction in the corporate tax would benefit large companies, like Reliance, Tata, Vedanta and Adani, more than medium-sized firms.

Auto

Hyundai bets on diesel models, launches Tucson SUV

Published

on

Hyundai-Tucson-SUV

Chennai, July 14 : The second largest car maker in India Hyundai Motor India Ltd while continuing to bet on diesel powered vehicles is also looking at faster demand recovery from tier 2/3 cities, said a senior official on Tuesday.

Hyundai Motor also launched its new premium sports utility vehicle (SUV) Tucson for the Indian market.

Speaking to reporters, Tarun Garg, Director (Sales, Marketing and Service) said the timing of Tucson’s launch is right as there are over five lakh Creta buyers in the country who are looking for an upgrade to a premium SUV.

The new Tucson’s starting price is about Rs 22 lakh.

“With over 6.5 million customers worldwide, Tucson is one of the best-selling SUV’s across the world,” S.S. Kim, Managing Director and CEO told reporters.

He said the model was unveiled at the Auto Expo 2020.

Garg said the booking for diesel engine models are growing and the demand is across the country and more so from tier 2/3 cities.

He said when the fuel prices go up, buyers will look at fuel economy and diesel engines are fuel efficient.

According to Garg, Hyundai Motor has got over 45,000 bookings for its SUV Creta model and 56 per cent of that are for diesel engine variant.

Similarly, one third of the booking for Venue and Verna are for diesel models, Garg said.

“SUV lovers want much more than the fuel economy which diesel vehicles offer. It appears demand will stablilise at this level. There is also good demand for petrol models,” Garg added.

Queried about the pay cuts implemented by various companies and its impact on buyers scaling down their model preference Garg said he is not seeing any such trend.

According to him, buyers prefer to come to the showroom to take delivery of new cars even though Hyundai Motor offers to deliver the car at their door step.

Garg said it is not possible to predict the likely sales for 2020 as some states have Covid-19 lockdown restrictions.

He said the company is watching the market behaviour on a monthly basis.

Garg said during June 2020, the company has reached 75 per cent of June 2019 demand figures, In July 2020 the car maker plans to touch 90 per cent of July 2019 levels.

On the availability of components as the company is planning to start third shift in its plant Garg said the localisation levels are very high and the dependence on components from China is very low.

According to Garg the company’s supply chain is ready to meet the demand for increased components as third shift production is soon to start.

Continue Reading

Business

No lay-offs by Wipro amid crorona crisis, no such plan

The Bengaluru-headquartered IT behemoth employs more than 1.75 lakh people in several countries across the globe.

Published

on

By

Azim Premji Wipro

Bengaluru, July 13 : Global software major Wipro has not laid off any employee during the Covid-19 pandemic nor has any such plan at the moment, a top company official said on Monday.

“I just want to give comfort and say this categorically that we have not laid off a single employee as the pandemic unfolded,” Wipro Chairman Rishad Premji said at the company”s 74th annual general meeting (AGM) held virtually.

“At the moment, we have no plans to lay off anybody at the company,” he said, replying to a female shareholder.

“We are trying to drive cost deductions through various other means operationally and otherwise,” said Premji.

The Bengaluru-headquartered IT behemoth employs more than 1.75 lakh people in several countries across the globe.

–IANS

Continue Reading

Business

Google to invest Rs 75,000 crore to boost digitisation in India

The investment will focus on four areas important to India’s digitisation– first enabling affordable access to information to every Indian in their own language.

Published

on

By

Sundar Pichai

New Delhi, July 13 : Google CEO Sundar Pichai on Monday announced a Google for India digitisation fund through which, the company will invest Rs 75,000 crore or approximately $10 billion over the next five to seven years to help India go digital.

“We will do this through a mix of equity investment, partnerships and an operational infrastructure ecosystem in India. This is a reflection of our confidence in the future of India and its digital economy,” Pichai said during the Google for India virtual conference.

The investment will focus on four areas important to India’s digitisation– first enabling affordable access to information to every Indian in their own language.

“Second, building new products and services that are deeply relevant to India”s unique needs. Third, empowering businesses to continue or embark on digital transformation. And fourth, leveraging technology and Artificial Intelligence for social good in areas like health, agriculture and education,” the Google CEO said.

India’s Union IT Minister Ravi Shankar Prasad were also present during the conference.

Continue Reading
Advertisement

Most Popular