Reduction of MAT Will be a Great Boost for Manufacturing Sector: Pre-Budget 2018

According to several reports, the world economy is slated to do well this year with a predicted global output of approximately 3%. Amidst synchronized global growth across developed economies and emerging markets, India is expected to be delivering a 7% growth rate in the coming fiscal. In our pre-budget industry oriented interactions, SMEStreet got Pre-Budget recommendations from the CFO of Tata Communications.

"While these predictions portend good tidings for the Indian economy, a reduction in the corporate and dividend tax rate and the abolition of all surcharges/cess etc would go a long way in bolstering organisations and helping them build a significant competitive edge in the global economy," says Pratibha Advani – CFO – Tata Communications, while  sharing an overview on taxation related amendments that can bring economic reforms.

Pratibha also added, "A reduction in the Minimum Alternate Tax (MAT) rates would also be very welcome. The funds saved have the option of being ploughed back to expand capacity and production thereby propelling the growth engine further."

From the perspective of motivating manufacturing entrepreneurs, "As it stands there is an incentivized deduction for R&D expenses for the manufacturing sector. The current plan for development for the future calls upon innovation in technology to define how we will live and work in the future. The pace of technological change makes it imperative that we invest in deep research and it would help if the government would afford the same impetus to the tech/ telco sector. This would not only ensure relevance but also a chance to be able to put our best foot forward and deliver some exciting breakthroughs for the new normal.

In addition, on a more operational level, it would be very helpful if  the applicability and implementation of Place of Effective Management (POEM) was moved to April 2018 as enterprises continue to grapple with the nuances of implementing GST.