Big agenda for tax reforms in the new year
For the New Year, the battle lines have been drawn by the Parthasarathi Shome committee for direct tax and the empowered committee of state finance ministers for indirect tax.
The reasons for the domestic cliff to have arisen is the way 2012 panned out. Last year can actually be split into two halves for tax policy purposes. The second half, from about the time when Prime Minister Manmohan Singh in July asked for standstill on the tax policies, was spent undoing the changes made in the first half.
The outcomes crafted by the tax officials will determine when the revised DTC and the GST will be introduced. Both of them have missed their respective deadlines. A Citibank research report issued in December notes the GST could add 1.2 per cent to the government revenues, at the same time cutting down rates on some of the taxes.
Industry therefore wants urgent implementation of these taxes. “The Goods and Services Tax, a game-changer to make