Union Minister Ravi Shankar Prasad on Friday exhorted electronics and mobile makers to take full advantage of the tax incentives announced by the government, saying the latest measures underlined the commitment to transform India into a manufacturing hub.
The comments came after the government slashed the tax rate for companies by almost 10 percentage points to 25.17 per cent and offered a lower rate of 17.01 per cent for new manufacturing firms in a bid to bolster economic growth rate from a six-year low by incentivising investments to help create jobs.
Prasad, who has been aggressively pushing electronics and mobile manufacturing in the country, had met captains of the industry earlier this week to hardsell India as a global production hub.
"I appeal to manufacturers to avail this incentive. India has the technology and human resource and an enabling government in place," Prasad told PTI on the sidelines of a conference on 'emergence and impact of Artificial Intelligence and Internet of Things' hosted by Jaipuria School of Business.
Prasad noted that the latest series of measures underscored India's commitment towards manufacturing.
It may be recalled that during CEOs roundtable held on September 16, the IT and telecom minister had nudged iPhone maker Apple to expand manufacturing base in India, and use the country as export hub, and had promised fresh sops to galvanise electronics as well as phone industry in coming 2-3 months.
Earlier in the day, Finance Minister Nirmala Sitharaman announced that to attract fresh investment in manufacturing and boost Make In India, new provision has been inserted in the I-T Act, which allows any new domestic company incorporated on or after October 1, 2019, making fresh investment in manufacturing, and starting operations before March 31, 2023, an option to pay income tax at 15 per cent.
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The effective rate for new companies would come to 17.01 per cent after considering surcharges and cess subject to the condition that they do not avail any other tax incentive or concession such as tax holidays enjoyed by units in special economic zones (SEZ) or accelerated depreciation.
This compares to the current base rate of 25 per cent for new companies and an effective tax rate of 29.12 per cent.