Though the main opposition party the BJP has been able to stall the Goods and Services Tax (GST) Bill, the UPA government is keen on introducing the Direct Tax Code (DTC) Bill in Parliament this week.
"We do expect DTC to be introduced in Parliament in this session," revenue secretary Sunil Mitra said at a CII event on yesterday. The bill will be introduced to replace the archaic Income Tax Act and seeks to rationalise tax slabs for both corporates and individual I-T payers.
Finance minister Pranab Mukherjee in his Budget speech has spelt out the centre's intention to implement both GST and DTC starting 1 April, 2011. Though the centre revised the initial draft of DTC twice, a similar effort went into the GST as well including building a consensus among states on certain contentious issues.
According to Mitra, under the new tax law substantial changes would be effected to the direct tax regime to make Indian trade and industry globally competitive. Regarding GST the revenue secretary said the Constitution amendment Bill would likely not be tabled in the current session and that the proposed indirect tax regime may miss the deadline of April 2011.
"In all probability, it (the introduction of GST) will miss the deadline," Mitra said.
"We have not been able to reach an agreement with the states or get the support categorically of all the states. If that does not happen, then obviously, the Constitutional amendment is unlikely to be pushed in this session," Mitra added further.