The government will reconstitute the task force that was set up in November last year to draft a new direct taxes code. The existing panel, with Central Board of Direct Taxes member Arbind Modi as convenor, could not submit a report following disagreements on various aspects.

“We will soon appoint a new convenor,” a government official told ET. Modi retired from the board in September. A person familiar with the deliberations of the panel said the committee could not agree on crucial aspects of the tax structure such as exemptions for individual taxpayers.

The task force was set up on November 22, 2017, following Prime Minister Narendra Modi’s observation at Rajaswa Gyan Sangam that the Income Tax Act prepared 50 years ago needed to be re-drafted. The panel’s terms of reference included drafting of an appropriate direct tax legislation, keeping in view the systems prevalent in various countries, international best practices and economic needs.

The committee was to have submitted its report in six months and was subsequently given a threemonth extension till August.

There was disagreement on the basic tenets of the direct tax structure among members of the task force, including GC Srivastava, former income tax official, Girish Ahuja, chartered accountant and nonofficial director of the State Bank of India, Rajiv Memani, chairman and regional managing partner of E&Y, Mukesh Patel, a tax advocate, and Mansi Kedia, a consultant with the Indian Council for Research on International Economic Relations.

Arbind Modi had also been tasked with drafting a new direct taxes code under the previous UPA government. A number of measures proposed in that code were incorporated in the current income tax law, but the whole draft was not taken up.