Roadmap for corporate tax reduction coming soon: Official

New Delhi, Nov 2:

The government is likely to unveil a roadmap by next month for doing away with corporate tax exemptions along with a phased reduction of this tax rate to 25 percent over four years, Revenue secretary Hasmukh Adhia said on Monday.

tax--621x414“The road map for phasing out of exemptions will be unveiled soon,” Adhia told reporters here.

On whether the plan could be out by the end of this calendar year, the secretary said: “It should come out.”

Presenting the current fiscal’s budget in February, Finance Minister Arun Jaitley had said the government would gradually reduce the corporate tax by five percent during the next four years from the current 30 percent and phase out various tax exemptions.

Asked whether the government is open to the idea of an out-of-court settlement in the Vodafone tax case, Adhia said: “They had invoked arbitration and we have responded to it. And if there is offer for out-of-court, the government will consider it.”

In the case involving British telecom major Vodafone, the Bombay High Court had recently ruled that there was no case for the government to raise a Rs.3,200 crore ($500 million) additional tax demand, thereby setting aside an earlier verdict by a tribunal.

Following this, the government decided not to challenge the verdict in the Supreme Court.

The income tax department had asked the company to pay additional income tax, alleging it had undervalued its shares in its subsidiary Vodafone India Services while transferring them to the parent company. (IANS)

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