No major benefit for telecom sector from corporate tax rate cut, says COAI

According to the Cellular Operators’ Association of India (COAI), the government’s move to lower corporate tax rate to 22 per cent would bring no major benefit for the stressed telecom sector.

Recently, the government reduced the base corporate tax for existing companies from 30 per cent to 22 per cent and for new manufacturing firms incorporated after October 1, 2019 and starting operations before March 31, 2023 from 25 per cent to 15 per cent.

However, the reduction will be subject to the condition that these companies will not be provided with any other incentive or concession like tax holiday enjoyed by units in special economic zones (SEZs) and accelerated depreciation.

Meanwhile, the Indian Cellular and Electronics Association (ICEA), has supported the government’s move of bringing competitive income tax rate of 15 per cent for new manufacturing units. As per ICEA, the move will further promote investments into the country’s mobile handset sector.