Ahead of the Monsoon session of Parliament that begins on Monday, Finance Minister Arun Jaitley is confident of securing the passage of the Constitutional Amendment Bill for the new indirect tax regime and has stressed that the government is committed to the implementation of the Goods and Service Tax (GST) regime and other tax reforms.
Terming GST a ‘landmark tax reform,’ the Minister said that tax policy, administration and its certainty has been the government’s ‘ priority’ as they are a necessity to promote both domestic and foreign investments, and highlighted the need to enhance India’s low tax base.
These remarks of Mr. Jaitley appear in a foreword he has authored for a book on India’s tax dispute resolution mechanisms written by tax practitioner and partner at BMR Advisors Mukesh Butani, which will be released in the capital on Wednesday by Supreme Court judge, Justice AK Sikri.
“Since our government came to power, we have come a long way in addressing this critical need at the [tax] policy and administrative level. To reduce tax litigation, we have introduced a host of actions including addressing the backlog of cases, accepting several recommendations of Tax Administrative Reforms Commission [TARC], deferment of GAAR [General Anti Avoidance Rules], expanding the reach of Authority for Advance Ruling [AAR] among others,” the Minister has noted.
“Our government is committed to tax reforms, in general, and implementing GST in particular, and I am confident that we shall be able to get the constitutional amendment, which shall pave the way for a landmark tax reform,” Mr. Jaitley wrote. This week, the government has made several overtures to build a consensus with the Opposition Congress, that has been opposing the GST Bill in its current form.
On Friday, Mr. Jaitley met senior Congress leaders Ghulam Nabi Azad and Anand Sharma to narrow the differences that are holding up the Bill’s passage in the Rajya Sabha where the NDA is in a minority.
“Once the session starts, we will meet again after discussing the issue within our parties,” Mr. Jaitley had said after the meeting. “India’s tax to GDP ratio is amongst the lowest in emerging markets, and it is imperative for a country of our size to materially improve tax compliance so that we are able to meet our financing commitments for infrastructural and developmental needs,” the Minister has pointed out in his foreword.
“Our government has initiated several policy reforms aimed at improving the ease of doing business leading to a jump of 16 places for India to 55th position among 140 countries in the World Economic Forum’s Global Competitiveness Index,” he pointed out and highlighted the pivotal role India would play in global taxation policies, as part of the G20 Base Erosion and Profit Shifting project.
The project aims to curb tax-avoidance strategies deployed by multinational firms to shift their profits to low-tax jurisdictions by exploiting differences in national tax rules.
