“This committee is only there to redraft the existing Income Tax law, so as to make it more comprehensible, to make it more simpler, more compliable, in order to give more tax certainty, reduce ambiguities.
The task force on the direct tax code (DTC) will not engage in rationalisation of tax rates as this was not its primary ambit, the new chairman of task force Akhilesh Ranjan said on Tuesday. He said that that the report on DTC would be submitted by February-end.
“This committee is only there to redraft the existing Income Tax law, so as to make it more comprehensible, to make it more simpler, more compliable, in order to give more tax certainty, reduce ambiguities. That’s the mandate as I see. Of course as I said I’m yet to initiate discussions on it,” Ranjan, who has recently been appointed as the member-legislation of CBDT, said while speaking at a CII event.
On the question of reducing corporate tax rates for the firms with revenue above `250 crore, Ranjan said that the move would have to be accompanied with stringent anti-avoidance measures in place so that no revenue loss takes place. While the firms in this category are small in number they contribute the major chunk of corporate tax.
Stressing the difficulty IT department faces in implementing anti-avoidance measures, Ranjan pointed out that general anti-avoidance rules (GAAR) had many checks and balances which makes the administration more complex. “It is difficult to simplify GAAR since by its very nature it’s a subjective provision. But that doesn’t mean that it will not be used. It will be used in worthwhile cases,” he added. Separately, Ranjan said that the department was examining the taxation issues with regard to payments made by Walmart Inc to various shareholders of Flipkart following the acquisition of the e-commerce firm. US retailer Walmart purchased 77% stake in Flipkart for about $16 billion (around Rs 1.05 lakh crore) in May.