Finance Minister Nirmala Sitharaman on Monday introduced the Taxation Laws (Amendment) Bill, 2019, in the Lok Sabha to replace the Taxation Laws (Amendment) Ordinance, 2019, which was used to slash corporate tax rate to stimulate growth rate in a slowing economy. The bill will replace the ordinance promulgated on September 20, 2019, to cut the rate of base corporate tax to 22% from 30%.
Ms. Sitharaman introduced the bill just before proceedings in the Lok Sabha were adjourned for the day, following Opposition uproar over political developments in Maharashtra. In addition, the International Financial Services Centres (IFSCs) Authority Bill, 2019, that provides for the creation of a unified financial regulator for IFSCs, was introduced amid the commotion.
FM Sitharaman had announced on September 20 the lowering of base corporate tax rate for companies that do not seek exemptions and reduced the rate for some new manufacturing companies to 15% from 25%. Including surcharges and cesses (levies to raise funds for specific purposes), the effective corporate tax rate will drop by nearly 10% to 25.2%.