New Delhi: Ruling out any reduction in corporate taxes, finance minister P Chidambaram today said the effective tax rates in India were already very low and any further reductions would only be possible unless exemptions were removed.

Speaking at a post-budget interaction with FICCI, Chidambaram said, "The effective tax rate in India is 19.2 per cent. Show me one Asian country, one ASEAN country which has an effective tax rate of less than 19 per cent."

Pointing out that it is not the scheduled rate but the effective rate, which matters, he said only if exemptions were removed could effective tax rates on corporate taxes rise and would there be scope for moderation of tax rates.

Responding to a suggestion that a committee should look into moderation of corporate tax rates, the FM said, "While I welcome your offer to join a committee to examine what the moderation would be, that committee should also examine how effective tax rate can rise to ASEAN level."

He said removal of the 10-per cent surcharge on corporate tax for small firms and companies was an indication that the government wanted to moderate taxes.

He said, 12 lakh small firms and companies had been immediately given relief of three per cent. "That`s an indicator of line we are pursuing for the future, we want taxes to moderate, we have moderated taxes, the moderation has applied this year to small firms and companies," he said.