Skip to main content

TASK FORCE TO DRAFT NEW DIRECT TAX LAW

TASK FORCE TO DRAFT NEW DIRECT TAX LAW
The government has brought back the main author of the now junked Direct Taxes Code (DTC) as a convenor of the task force to review the decade sold provisions of the IncomeTax Act and draft a replacement. The government has, however, already implemented many provisions of the draft DTC, such as the General Anti Avoidance Rules (GAAR) and on Place of Effective Management.
The government has constituted a six member panel to take forward Prime Minister Narendra Modi´s call for replacing the ITAct,aweek after it notified an overhaul of the goods and services tax (GST). The panel has been asked to submit report within six months.
Arbind Modi, member (legislation) of the Central Board of Direct Taxes (CBDT), is convenor of the task force. Chief Economic Advisor Arvind Subramanian will be a permanent special invitee.Rajiv Memani, chairman and regional managing partner, India region, EY, who was named member of the task force, said,"The government continues to undertake bold yet muchneeded reforms.
This stead fast focus will enhance India´s competitiveness and make the country future ready."The panel will draft direct tax legislation, keeping in mind the system in other countries, international best practices and economic needs of the country, say the terms of reference.
Neeru Ahuja of consultancy Deloitte India recalled the earlier occasion the government tried to rewrite the Act, in 2010, the DTC was the outcome."Ironically, significant changes which were proposed in the DTC have since been incorporated in the Act over the years.
A lot of movement has happened in the tax world since then, the most important being (on) BEPS (base erosion and profit shifting)," she said. Frank D´Souza of consultants PwC said with the experience of DTC, it would be interesting to see how this attempt would unfold.
"Clearly, the need to have the law more relevant to the current economic and business environment is very much there." Sanjay Sanghvi of Khaitan &Co felt present law already contained most of the international best practices —GAAR, transfer pricing, BEPS and so on. "It would be helpful if the new tax law emphasises more reasonable and fair administration of the laws, to address the concerns on uncertainties and needless litigation," he said.
The Business Standard, New Delhi, 23th November 2017

Comments

Popular posts from this blog

At 18%, GST Rate to be Less Taxing for Most Goods

About 70% of all goods and some consumer durables likely to cost less

A number of goods such as cosmetics, shaving creams, shampoo, toothpaste, soap, plastics, paints and some consumer durables could become cheaper under the proposed goods and services tax (GST) regime as most items are likely to be subject to the rate of 18% rather than the higher one of 28%.

India is likely to rely on the effective tax rate currently applicable on a commodity to get a fix on the GST slab, said a government official, allowing most goods to make it to the lower bracket.

For instance, if an item comes within the 12% excise slab but the effective tax is 8% due to abatement, then the latter will be considered for GST fitment.

Going by this formulation, about 70% of all goods could fall in the 18% bracket.

The GST Council has finalised a four-tier tax structure of 5%, 12%, 18% and 28% but has left room for the highest slab to be pegged at 40%. A committee of officials will work out the fitment and the council…

Coffee-Toffee, the GST Debate Continues

Hundreds of crores of rupees in the form of taxes ride on the exact categorisation of products Is Parachute hair oil or edible oil? Is KitKat a chocolate or a biscuit? Is a Vicks tablet medicament or confectionery? For the taxpayer and the tax collector, this is much more than an exercise in semantics -hundreds of crores of rupees ride on the exact categorisation.
As the government moves closer to rolling out the goods and services tax (GST) on July 1, many such distinctions are being debated so that no ambiguity remains. Not just that, the government is revisiting old tax cases that were lost over product categorisation, according to people with knowledge of the matter, presumably with a view to making sure that revenue collections can be maximised. “In the past, several tax officers had challenged some of the product categorisations, including those in the retail segment, but lost out in court or at appellate level,“ said one of the persons. “Now we have a chance to go ahead with speci…

Deposit gush:-CA Institute Bats for Special Audit