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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


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