Godrej Consumer Products Limited (GCPL) has welcomed the Union Budget provision allowing companies to set off up to 25 per cent of their tax liability against accumulated Minimum Alternate Tax (MAT) credits under the new tax regime, terming it a positive step for corporate India. Commenting on the announcement, Sudhir Sitapati, Managing Director and Chief Executive Officer of Godrej Consumer Products Limited, said the move would significantly ease the transition to the new tax structure for companies carrying legacy MAT credits.
“We particularly welcome the MAT credit set-off being allowed up to 25 per cent of the tax liability under the new tax regime. This move improves cash flows and makes the new tax regime smoother for companies with accumulated credits,” Sitapati said in a statement. He added that the policy change would help unlock capital that was otherwise tied up, enabling companies to channel funds into reinvestment and expansion. According to him, improved liquidity is expected to support growth, especially in consumption-led categories that form the backbone of India’s fast-moving consumer goods sector.
The MAT credit relief is likely to encourage more companies to shift to the new tax regime, aligning with the government’s broader objective of simplifying taxation while supporting investment and economic growth.