The Central Board of Direct Taxes has been re-engineering allocation of its 80% of manpower for putting in place a Consolidated Processing Centre to process income-tax returns that will shortly come up in Bangalore followed by other such cities, indicated Member CBDT.

Although Union Finance Minister will not make customary budget presentation in February 2009 as it will be an election year and preceded by a vote on account for which date has yet to be finalized, it will execute New Tax Course in fiscal 2008-09 itself to enable businesses remain competitive in India.

Announcing this at ASSOCHAM organized  5th International Tax Conference here, Member Legal CBDT, Ajai Singh assured Indian Inc. that his Ministry would put in place a simpler new tax course in this fiscal itself to ensure that business remain competitive and cross border disputes are barely referred to jurisprudence for resolution.

The 1961 tax code no longer keeps pace with current business development and despite acute shortages of qualified tax manpower in the Finance Ministry, 20% of high knowledge volume manpower has been engaged to draft the proposed new tax course, said Singh further pointing out that it would be shortly referred for Cabinet approval.

The Central Board of Direct Taxes has been re-engineering allocation of its 80% of manpower for putting in place a Consolidated Processing Centre to process income-tax returns that will shortly come up in Bangalore followed by other such cities, indicated Member CBDT.

In the new tax course, the transfer pricing issue would be sorted out in a manner so that level playing field is ensured for multinational corporations operating in India vis--vis domestic corporates, said Singh. With proposed tax course in place, a new global transfer pricing strategy would be evolved to satisfy all elements, organizations and concerned stakeholders so that it is resolved for good.

The resolution of disputes would be on faster track and that too without often referring them to available legal frame or jurisprudence so that flow of foreign direct investments and movement of large multinational corporations towards India further progresses, said Member CBDT. On a question about Notification on Commodity Transaction Tax, Singh said that a decision to this effect would be taken at much higher level and therefore, he would not be able to commit any date for this.

Singh, however, emphasized that international tax considerations figure prominently in decisions that multinational corporations and their leader make global. The developments in the past have posed new challenges and problems on various dimension of taxation and transfer pricing is rated as one of the most important tax issue facing multinational companies.

That is why a provision of level playing field would be incorporated in new Tax course to ensure that the entire supply chain which include research and development, manufacturing, marketing, distribution and after sale services are kept intact to maintain accuracy in tax compliances, indicated Singh. In his opening remarks, O P Vaish, Chairman, ASSOCHAM International Tax Committee called for modern tax laws especially emphasizing the need for putting in place new transfer pricing mechanism so that minimum disputes arise between MNCs and their partners in domestic country.

Vaish further emphasized that 61 Tax code has grown extremely outdated and needs to be revamped and modernized. M H Dalmia, Chairman, ASSOCHAM Committee on Direct Tax echoed similar sentiments for modernization of new tax structure to ensure higher voluntarily tax compliance of corproates and individuals.

D S Rawat, ASSOCHAM Secretary General  in his remarks welcomed the announcement made by Singh for putting in place a new Tax Course in fiscal 2008-09 itself despite budget proposals for fiscal 2009-10 being postponed in view of election year.