The company termed the policy as ‘we don’t want you’ tax policy. It is worthwhile to note that while the effective corporate tax rate in India is around 25%, the same in Japan is 30.62%. In the event of a wonky taxation regime, new car makers would not have lined up to launch products in India. The 28% tax rate may seem excessive, especially since it has a compensation cess which is further levied on top of it. But a frequently missed point about the Goods and Service Tax regime is the input tax credit at every stage of the value addition process.

Source: Mint September 15, 2020 12:06 UTC