Govt sets deadline of six months for rolling out Direct Tax Code and GST
October, 28th 2014
The government has set itself a deadline of six months to implement Direct Tax Code (DTC) and Goods and Services Tax (GST) as part of its action plan to ease the doing business in India.
Besides rolling out the DTC and GST as part of simplifying tax regime in country to push Prime Minister Narendra Modi's 'Make in India' initiative, the government has drawn an ambitious action plan to improve India's ranking in 'Doing Business Report' of the World Bank and it includes measures like providing electricity connections within two weeks of applying.
The department of industrial policy and promotion (DIPP) on Tuesday held an interactive session with babus of the all stakeholder ministries to have a better understanding of the issues involved.
In its ‘Doing Business in India’ report of 2014, the World Bank has ranked India at 134th place. At the inauguration of Make in India’ campaign, Prime Minister Narendra Modi called for substantially improving India’s rank. At the moment India lags behind China (96), Nepal (105), Pakistan (110) and Bangladesh (130) in the ranking. PM Modi wants to bring the country in top 50 rankings.
The DIPP after a detailed exercise identified the sectors, specific activities and ministry of department where reforms are required.
The DIPP in its action plan has flagged issues like reduction of number of taxes, online payment of taxes to expedite implementation of direct tax code and goods and services tax for the finance ministry. The plan has set a deadline of six months for rolling the DTC and GST regime.
According to the DIPP, at the moment, firms make 33 tax payments in a year and spend 243 hours a year filing preparing and paying taxes.
The government also wants to introduce payment of VAT refund directly in the account of firm and in a time-bound manner.
For the ministry of power, the agenda is simplification of process of electricity connection. At the moment it requires seven procedures and takes 67 days. The government wants to bring it down to two weeks. Besides it also wants to remove the requirement of pollution control certificate for providing the electricity connection.
According to the action plan, the ministry of corporate affairs is expected to bring down the time taken in registration of business in India from existing 27 days to one day. Besides, doing away from the requirement of company seal to minimum paid up capital for starting a business are also part of the measures that the corporate affairs ministry is to take within three months to 30 days.