The government is inching closer to introducing the Direct Taxes Code (DTC) by April next year, but implementation of the Goods and Services Tax (GST) is likely to be deferred.
The finance ministry, for the first time, has admitted it might again miss the deadline for rolling out GST, whereas DTC would be tabled in the ongoing monsoon session of Parliament.
The original deadline for GST introduction was April 1 this year.
“We do expect the DTC to be introduced in Parliament in this session,” Revenue Secretary Sunil Mitra told reporters on the sidelines of an event organised by industry body CII. “In all probability, it (introduction of GST) will miss the deadline,” PTI quoted Mitra as saying.
Later, he told reporters the Constitution Amendment Bill on GST was quite unlikely in the current session, which is coming to an end on August 31. He did not say when the GST would come into effect.
“We have not been able to reach an agreement with 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 said, and added, “If we could set (Constitutional Amendment Bill) in (monsoon session), it could have been examined by select committee and voted in the winter session. Then we would have time for ratification by 50 per cent states and for introduction of GST legislation and Central legislation, which could then be debated discussed and perhaps voted in the budget session.”
While DTC will replace the existing Income Tax Act, the GST regime will subsume taxes such as excise, service tax, value-added tax and state levies like octroi.
The finance ministry had come up with the revised draft of DTC after the industry slammed the original code. The ministry is now ready to take the revised draft to Parliament. It also made changes to the Constitution Amendment Bill on GST to address the concerns of the states. The amendments were not sufficient for the states ruled by the Bharatiya Janata Party, which asked for more time to go through the draft. The BJP is the main Opposition party in Parliament,
“We do believe that we will find convergence of views with the states. (It) is a matter of time. The states have asked for a month’s time to study and which is fair, I think,” Mitra said.
On DTC, he said the concerns of industry on the present tax exemptions to special economic zones would be taken on board while framing the DTC Bill.
