Finance Minister Arun Jaitley Tuesday assured the industry that the government would strive to lower tax rates and broaden the tax base to increase revenue collection.
In an interaction with Ficci, the minister also called upon the industry to pass on benefits of GST rate reduction to consumers.
"The finance minster said that the thrust of the government is to lower the tax rate and increase the tax base and keep the revenue collections moving up. He said that the indirect tax collections will further increase in future," a finance ministry statement said.
The minister said GST is now on the track and is in process of fast settling down and the government will continue with direct and indirect tax reforms in order to facilitate and further expedite the process of ease of doing business in the country.
"He (Jaitley) asked the captains of Indian industry to comply with the recent recommendations of the GST Council with regard to reduction of rates of various items and pass on the benefits to the consumers at large," the statement added.
Talking to reporters after the meeting, Ficci President Sandip Somany expressed satisfaction over the minister's assurance that the corporate tax rate would be brought down to 25 per cent with the increase in revenue collection.
Currently, businesses with turnover of up to Rs 250 crore pay corporate tax of 25 per cent, while those above the threshold are taxed at 30 per cent.
"The Honourable Minister had promised 25 per cent income tax rate, which has now been done for the companies which are MSME up to a turnover of Rs 250 crore. He has promised that as the revenue collections from GST go up over a period of time he will rationalise the taxes for the rest of the corporate sector over the next few years," Somany said.
Jaitley said that the Government is committed to facilitate trade and industry in the country so that the momentum of the growth continues to move-up.
"India continues to be the sweet spot as far as the Foreign Direct Investment is concerned and is the fastest growing economy in the world. The Government is committed to keep this growth momentum high and inclusive to ensure that the benefits of growth reaches to all sections of the society especially to the vulnerable and weaker sections," Jaitley said.
Requesting for lowering of corporate tax, Somany had said that rate rationalisation would make the Indian corporate sector globally competitive.
Banking sector consolidation and the need for divestment of government shareholding in some of the banks were also discussed. It was also emphasised that country should have a Development Finance Institutions to be able to provide long term finance for growth of the industrial and infrastructure sectors.
The importance of the NBFC sector was highlighted and members drew attention to growth in the consumer durables and real estate sector, much of which was supported by the NBFC sector. In this context it was mentioned that while the liquidity situation in the market had improved, some more steps were needed to restore the situation to complete normalcy, the Ministry said.
Discussions were also held on the need to take steps to improve employment generation in the economy.
Somany urged the minister to reintroduce investment allowance linking it with employment generation and also extend the Phased Manufacturing Programme to other sectors where the country is largely dependent on imports, the Ministry added.
When asked about the US decision to withdraw duty benefits on Indian products under the Generalized System of Preferences (GSP) programme, Somany said it will make Indian industry less competitive.
"I'm sure government will take appropriate action and there will be dialogue between the two governments to make sure that this is not withdrawn in case of India, Somany added.
US President Donald Trump has said he intends to end the preferential trade status granted to India and Turkey, asserting that New Delhi has failed to assure America of "equitable and reasonable" access to its markets, an announcement that could be seen as a major setback to bilateral trade ties.