Union Budget 2021 Budget Demands: From the budget 2021 to be presented on February 1, SME partnering firms want the benefit of corporate tax cuts. Although the government had cut corporate tax in September 2019 to give a boost to the manufacturing sector, but this cut did not benefit small and medium partnering firms. Ludhiana’s hosiery industry demands that Finance Minister Nirmala Sitharaman take steps in this direction in the budget.
Sudarshan Jain, president of Knitwear and Apparel Manufacturers Association of Ludhiana (KAMAL), says that we have been demanding corporate tax cuts for SME partnership firms for the last three years but no steps have been taken so far is. The reduced rate of corporate tax should also be applied to these partnership firms as partnership firms account for about 90 per cent of the total SME companies in the country.
How much corporate tax was reduced last year
Explain that in September 2019, the government reduced the base corporate tax rate for domestic companies from 30 percent to 22 percent. Also came into existence after 1 October 2019 and the rate of corporate tax has been reduced from 25 per cent to 15 per cent for new manufacturing companies starting operations before 31 March 2023.
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ECLGS has gained
Regarding the Emergency Credit Facility Guarantee Scheme (ECLGS) announced in May 2020 under the Self-Reliant India Package for Micro, Small and Medium Enterprises (MSME), Jain said that the scheme proved to be a good decision of the government. Many MSME companies have taken advantage of ECLGS to rebuild the business during the Corona era. In ECLGS, additional loan is being provided to businessmen, money borrowers and individuals for business purposes up to 20 per cent of their outstanding loans till 29 February 2020. This loan is completely collateral free.
Guarantees for additional loans under ECLGS are being given by the government. Under the scheme, there will be a maximum interest of 9.25 percent on the loans taken from banks, while non-banking financial institutions (NBFCs) will be able to take interest at the rate of 14 percent. The term of the loan in the scheme is four years, in which the withdrawal of the principal amount for one year will be exempt. ECLGS is valid until 31 March 2021. The government has targeted to distribute a loan of Rs 3 lakh crore under this scheme.
Source: www.financialexpress.com