Main opposition BJP may have stalled the Goods and Services Tax (GST) Bill, but the UPA government is keen to introduce the Direct Tax Code (DTC) Bill in Parliament this week.
"We do expect DTC to be introduced in Parliament in this session," revenue secretary Sunil Mitra said at a CII event on Tuesday. DTC Bill is to replace the archaic Income Tax Act by rationalising tax slabs for both corporates and individual I-T payers.
Finance minister Pranab Mukherjee had, in his Budget speech, indicated the Centre's intention to implement both GST and DTC from April 1, 2011. While the Centre had revised the initial draft of DTC twice, a similar effort went into GST as well such as building a consensus among states on all the contentious issues.
Mitra said the new direct tax law, which seeks to substantially change the direct tax regime, would make "Indian trade and industry globally competitive".
On GST, the revenue secretary said the Constitution amendment Bill was unlikely to be tabled in the current session and that the proposed indirect tax regime may miss the deadline of April 2011. "In all probability, it (the introduction of GST) will miss the deadline," Mitra said. He cited lack of consensus on the issue behind the decision not to table the Bill.
"We have not been able to reach an agreement with the states or get the support categorically of all the states. If that does not happen, then obviously, the Constitutional amendment is unlikely to be pushed in this session," Mitra added further. Though the Centre had redrafted the GST bill giving all the states veto power in the apex Goods and Services Tax Council, the BJP ruled states still objected to a "hurried" decision to implement the indirect taxes reforms. Now, the empowered group of state finance ministers have taken a month to study the revised draft.
"We do believe that we will find convergence of views with the states. The states have asked for a month's time to study and which is fair I think," Mitra observed.