Lok Sabha Question No. 2157 (UNSTARRED), answered on 2024-08-05
Subject: Concerns Regarding the Taxes
Ministry: FINANCE
Asked by: Shri Amrinder Singh Raja Warring

## Government of India Ministry of Finance Department of Revenue

## LOK SABHA

## UNSTARRED QUESTION NO. 2157

TO BE ANSWERED ON MONDAY, AUGUST 5, 2024 SHRAVANA 14, 1946 (SAKA)

## CONCERNS REGARDING THE TAXES

## 2157 SHRI AMRINDER SINGH  RAJA WARRING:

Will the Minister of FINANCE be pleased to state:

- (a) whether the Government reduced basic corporate tax rate to 22% from 30% in 2019, if so, the details thereof;
- (b) whether there are any plans to reduce the same for partnerships, HUF and individuals as well;
- (c)  whether there have been many concerns raised regarding the Section 43 B(h) of the Finance Act,      2023 especially from the MSME sector and industries, if so, the details thereof;
- (d) whether the Government is planning to drop this or increase the specified time limits since the timeline of a 45 days seems impractical especially in the cases where from sourcing raw material to manufacturing finished goods takes more than 180 days, if so, the details thereof;
- (e) whether the Government has any plan to deal with such cases, if so, the details thereof;
- (f)  whether there is a different GST rates for shawls i.e. 5% upto Rs.1000 and 12% above Rs. 1000; and
- (g)  if so, whether the Government is planning to introduce a single GST rate for shawls as well and if so, the details thereof?

## ANSWER MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a)  to  (b)  :  A  concessional  tax  regime  of  22%  for  all  existing  domestic  companies  was introduced from FY 2019-20 if they do not avail any specified exemption or incentive.

Rates of taxation of income for various categories of persons, including partnership firms, individuals and Hindu undivided family (HUF), are finalised as part of the budgetary exercise for each year and are specified in the Finance Act for the respective year. There is no proposal to reduce the rate for partnerships.

Further, with effect from assessment year 2021-22, individuals and HUFs can avail a concessional taxation regime under section 115BAC of the Income-tax Act, 1961 ('the Act'). There  is  an  option  to  pay  income-tax  at  lower  slab  rates  subject  to  certain  conditions including that they do not avail specified tax exemptions or deductions.

These rates have been further reduced with effect from assessment year 2024-25 and made the default rates for certain categories of persons. Finance (No. 2) Bill, 2024 has now proposed further changes in the slab structure in the new taxation regime with effect from assessment year 2025-26.

(c) to (e) : Various representations have been received regarding the implementation of clause (h) of section 43B of the Act. Vide Finance Act 2023, clause (h) was inserted in Section 43B of the Income-tax Act 1961 to provide that any sum payable by the assessee to a micro or small  enterprise  beyond  the  time  limit  specified  in  section  15  of  the  Micro,  Small  and Medium Enterprises Development (MSMED) Act 2006 shall be allowed as deduction only on actual payment. It can be allowed on accrual basis if the payment is within the time mandated under section 15 of the MSMED Act, 2006. This measure aims to provide timely payments to Micro and Small enterprises. The provisions of clause (h) of Section 43B of the Act follow the existing provisions of the MSMED Act 2006 which prescribes the timelines.

(f) Yes, Shawls, knitted or crocheted, of sale value not exceeding Rs 1000/- per piece attract GST rate of 5% and 12% if sale value exceeds Rs 1000/-per piece.

(g)  No,  GST  rates  are  prescribed  on  the  recommendations  of  the  GST  Council  which  is  a constitutional body consisting of Union and State/UT Governments

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