Only a handful of MSMEs may gain from 5% cut in corporate tax
14/02/2018
PUNE: The 5 per cent reduction in corporate tax, as announced in the Budget, will benefit only a handful of micro, small and medium enterprises (MSMEs) across the country.
The corporate tax is levied on the revenue of a company after taking into deductions such as depreciation and other operational expenses. The income tax data shows that many companies show higher expense and pay no tax.
Udyog Aadhaar enrolment mechanism replaced all other forms of online and offline registrations from September 2015. Till now, over 35,000 MSMEs have registered themselves in the Pune district. Across state, over 3,80,000 MSMEs have registered .
Going by this, the announcement is likely to benefit at most only about 1,000 MSMEs in the district with a turnover of Rs 50-250 crore (3 per cent of total enterprises). Across the state, only about 12,000 MSMEs stand to benefit from the tax rate cut, provided they are paying any taxes presently. The available data shows that not all of them are paying any tax.
Udyog Aadhaar portal seeks to capture details like the company’s Aadhaar number (mandatorily linked to Permanent Account Number), national industry classification code, previous registration details, if any and investments, among others.
An official in the district industries centre said though the registration is “voluntary” many MSMEs are registering themselves because it offers them protection in cases of non-payments and cheating by their buyers.
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