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Rediff News  All News  » Business » DTC requires a fresh look: Chidambaram

DTC requires a fresh look: Chidambaram

August 29, 2012 10:26 IST

P ChidambaramFinance Minister P Chidambaram said on Tuesday the direct taxes code would need a fresh look.

The much-awaited tax reform was scheduled to be implemented from April 1, 2013, but a review of its proposals might delay its introduction.

Asked whether DTC and the goods and services tax (GST) would be introduced from April 2013, Chidambaram said: "DTC requires a fresh look, but we can get the GST Bill by the end of this financial year."

Chidambaram, who took charge of the finance ministry on August 1, said he was just 28 days old in the ministry and needed some time to look at DTC which had gone through various versions.

On whether General Anti Avoidance Rules (GAAR) would get postponed again, Chidambaram said he was awaiting the report of the Shome Committee which was looking into the issue.

DTC, which seeks to replace the 51-year-old Income-Tax Act, was originally conceptualised during Chidambaram's earlier tenure in the finance ministry.

When Pranab Mukherjee was the finance minister, the Bill underwent several changes, making it very different from the original Bill.

The Parliamentary Standing Committee on Finance has already given its recommendations on the DTC Bill and now the finance ministry will have to introduce it in Parliament after seeking the Cabinet nod. On the other hand, the Constitutional Amendment Bill for GST is under the consideration of the committee.

Addressing a press conference after a meeting with chief commissioners and director generals of income-tax, central excise, customs and service tax on Tuesday, the finance minister said he was hopeful that the indirect tax collection target of Rs 5.05 lakh crore (Rs 5.05 trillion) during the current fiscal would be met.

"Most people would like to be compliant with tax laws. It is only a very small number that wishes to be non-compliant.

"I have told the department that we have to be firm with the small number of those non-compliant people," he said, stressing on an interactive and friendly tax administration.

Chidambaram said he has asked his officers to focus more on top 100 tax payers in customs, excise and service tax in each zone to achieve the target as they account for about 95 per cent of the tax collected. He asked officials not to hound the taxpayers.

He said April-July collection figures of indirect taxes do not reflect the trend and the numbers beyond August will be more encouraging.

Indirect tax collection during April-July increased 22 per cent, against the annual target of 27 per cent.

"Most chief commissioners are naturally resentful of the fact that powers are getting centralised. I have assured that powers will be de-centralised.

The tax administration of large country like India cannot be run by fiat from Delhi. So large number of powers will be de-centralised," he added.

Image: P Chidambaram

BS Reporter in New Delhi