JOIN USTwo years after introduction of amendment in India’s tax laws that made it retrospective and spooked investors, the BJP-led government on Monday said it was committed to rationalising and simplifying the tax regime which was conducive to investment.
It also promised to introduce the most awaited indirect tax reform, the Goods and Services Tax (GST).
“It will embark on rationalisation and simplification of the tax regime to make it non-adversarial and conducive to investment, enterprise and growth,” President Pranab Mukherjee said spelling out the priorities of his government in a joint address to Parliament after Lok Sabha elections.
The retrospective tax laws were announced in the Union Budget of 2012 by the then finance minister Mukherjee himself with a view to ramp up government’s revenues.
He had proposed amendments in India’s tax rules retrospectively from April 1, 1962.
Since then foreign investors have been pitching for prospective tax laws amendments. Also non-clarity over certain tax rules, especially transfer pricing and retrospective tax amendment, has led to a rise in litigations.
Mukherjee said, "Reforms will be undertaken to enhance ease of doing business.”
Another indirect tax reform, the GST, which is awaiting passage by Parliament due to opposition from states will also be expedited, the president said.
“My government will make every effort to introduce the GST while addressing the concerns of states. Reforms will be undertaken to enhance the ease of doing business,” he said.
In his pre-Budget interaction with his state counterparts, Finance Minister Arun Jaitley too hoped that GST would soon become a reality with cooperation from states. The only stumbling block for GST is getting all the states on the same page.
Once implemented, GST will help streamline the entire flow of goods and services.
The ambitious indirect tax reform could not be passed during the Congress-led United Progressive Alliance regime for want of consensus on different issues.
A Constitution Amendment Bill was introduced in the Lok Sabha in 2011.
DH News Service