DTC Bill In Monsoon Session Of Parliament (22-Jul-2010)
Union Finance Minister Pranab Mukherjee said on Thursday that the government would introduce the Direct Taxes Code (DTC) Bill, that aims at overhauling the half a century old direct tax regime in the country, in the monsoon session of Parliament beginning July 26. He was addressing the meeting of the National Executive Committee of FICCI on tax reforms in the country.
The FM said that the government wanted to present the stakeholders with a taxation regime which would be simple and broad-based leading to lowering of tax rates, better tax compliance and reduced litigation. Mukherjee added that the new DTC will take into account established and time tested practices which have withstood judicial scrutiny.
“In the Draft Direct Tax Code, it has been our endeavour to incorporate the best global practices and to use innovative methods for attaining equity- vertical and horizontal, ensure growth with sustainability, create stable fiscal eco-system and have well regulated free markets… The draft DTC after taking into account the suggestion on revised discussion paper is under legislative drafting. I intend to introduce draft DTC in monsoon session of parliament,†he said.
Regarding reforms in indirect taxes, he said that the Centre and State governments had been able to develop convergence on many contentious issues relating to the goods and services tax (GST) during his meeting with Empowered Committee of State Finance Ministers on Wednesday and reiterated government commitment to implement the unified indirect tax by start of next fiscal.
Mukherjee stressed that the list of 99 goods that are currently exempted from VAT will continue to get exemption in the GST regime. “On exemptions, we have proposed to review the existing exemptions from Central Excise duty so that the list of goods exempt from CGST is aligned to the SGST list and 99 items currently exempt from VAT are exempt from both components of GST,†he said.
With regard to GST rate structure, he said the government believes that full potential of GST could be realized only if a single rate structure with unification of the rate for goods and services was adopted. However, such a policy would be implemented in a phased manner so that the revenue of state governments is not affected. Mukherjee said that GST could be started with an effective rate of 15% which could be brought down to around 12% in three years.
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