PwC for extension of beneficial tax regime for new manufacturing cos

New Delhi: Tax consultancy firm PWC has urged Finance Minister Nirmala Sitharman to extend the beneficial tax regime for new manufacturing companies and introduce a comprehensive tax amnesty scheme for cases related to Customs. Sitharaman is scheduled to present the Union Budget for 2024-25 on July 23. "I think the Make in India is the first thing which comes to mind, and you will recall that in 2019, the government introduced a 15 per cent rate for new manufacturing companies, which lapsed on March 31, 2024. "I think that is one extension, which is being expected, and the expectation is also that instead of giving a year-on-year extension if we can look at the block period, say for the next five years because shifting a manufacturing is a big decision and the corporates may take time before making a decision and make it viable, feasible and that's the first bit," said Sandeep Puri, Partner, Price Waterhouse & Co LLP.

Section 115BAB of the Income Tax Act offers a concessional tax rate of 15 per cent for new domestic manufacturing companies. Initially, this benefit was available for companies set up and registered after October 1, 2019, and commencing production by March 31, 2023, which was later extended to March 31, 2024, to account for delays caused by the COVID-19 pandemic. PwC has also made a case for the introduction of a comprehensive tax amnesty scheme under Customs to clear past litigations on the lines similar to the Sabka Vishwas Legacy Dispute Resolution Scheme, 2019, for pre-GST era indirect taxes and Vivad Se Vishwas scheme for Income tax.

As part of the amnesty scheme, the government could provide a partial waiver of the duty in dispute, depending on the quantum involved and a complete waiver of interest and penalty. On Tuesday, Sitharaman participated in a traditional 'halwa' ceremony, marking the final stage for preparation of the Union Budget 2024-25 to be unveiled on July 23 in the Lok Sabha. The ceremony is a ritual in which traditional dessert 'halwa' is prepared and served to officials and staff members of the finance ministry who are involved in the preparation of the budget. It is organised in the basement of the North Block, which houses the ministry in the national capital and is attended by the finance minister and other high-ranking officials.