The company, however, wants deferment of sunset clause for SEZs
Dr Reddy’s Laboratories (DRL) has welcomed the government’s move on the initiative to simplify taxation laws. Saumen Chakraborty, President and CFO, said that Central Board of Direct Taxation’s release relating to tax reduction from 30 per cent to 25 per cent over next four years, coupled with phasing out the investment linked and profit linked deductions is a step in the right direction, however, at the same time, the government should also consider a reduction of MAT in a phased manner as well.
However, he added, “The introduction of a sunset clause for SEZs wef March 31, 2017, seems to be at odds with the ‘Make in India’ objective. This could be deferred for a few more years, considering the significant investments by the companies, as also the impact SEZs encountered due to the MAT levy.
Chakraborty further said, “The withdrawal of R&D weighted deduction is potentially counter-productive and likely to negatively impact India’s innovation efforts. Countries across the world have been introducing various measures for promoting R&D initiatives in form of R&D credit, R&D weighted deduction and Patent Box etc. The R&D weighted deduction must continue, so as to provide India level playing field in an increasingly competitive global innovation environment.”