Moneycontrol
Last Updated : Oct 10, 2018 11:45 AM IST | Source: Moneycontrol.com

Report on direct tax reforms on hold as panel chief retires

Arbind Modi, the convenor of the six member task force, retired on September 30; govt to appoint new convenor

Shreya Nandi @shreyanandi15

A revamp of India’s direct tax system may take more time to kick off as the task force is yet to submit its report on a new law .

Besides, Arbind Modi, the convenor of the six member task force, as well as the member of the apex policy making body Central Board of Direct Taxes (CBDT) retired on September 30.

The draft direct tax law will be submitted after the government appoints a new convenor for the task force, a senior finance ministry official told Moneycontrol.

“The government is in the process of finding a new convenor of the committee that has been working on finalising a report on India’s new direct tax legislation,” the official said.

The discussion on reforms pertaining to taxation started in September, 2017, when the Prime Minister Narendra Modi said that more than half a century old Income-Tax Act needs to be re-drafted and a new Direct Tax Code (DTC) needs to be introduced in ‘consonance with economic needs of the country’.

Acting upon it, the finance ministry on November 22 constituted a task force comprising six members, as well as the Chief Economic Adviser (CEA) Arvind Subramanian, as a permanent special invitee in the task force.

Subramanian is currently not a part of the committee as he resigned from his post of CEA last month to return to academic research in the US.

Apart from Arbind Modi, who was heading the task force, Girish Ahuja, practicing chartered accountant and non-official director, State Bank of India, Rajiv Memani, chairman and regional managing partner of E&Y, Mukesh Patel, practicing tax advocate in Ahmedabad, Mansi Kedia, consultant, ICRIER, and G.C. Srivastava, retired bureaucrat are part of the team.

The panel was supposed to submit the draft report on May 22, but sought an extension of three months that got over in August.

The erstwhile UPA government had finalised DTC and had introduced the Bill in the Parliament in 2010. However, the Bill lapsed with the dissolution of the 15th Lok Sabha. It aimed at simplifying tax legislation, widening the tax base, while removing a number of exemptions.

The task force is in the process of drafting a direct tax legislation keeping in mind, tax system prevalent in various countries, international best practices, economic needs of the country, among others. Some of the provisions of the DTC such as General Anti-Avoidance Rule (GAAR) and Place of Effective Management (PoEM) has already been implemented.
First Published on Oct 10, 2018 11:45 am
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