All material subject to strictly enforced copyright laws. © 2022 ITR is part of the Euromoney Institutional Investor PLC group.

Chidambaram brings Indian DTC Bill back into focus

chidambaram.jpg

While this month’s interim Budget in India was merely a vote-on-account and went largely unheralded in the corporate tax world, Finance Minister Palaniappan Chidambaram did make pledges regarding the Direct Taxes Code (DTC) and goods and services taxation (GST).

Chidambaram confirmed that the DTC will be put on the government’s website for public consultation. First introduced in 2010, the DTC Bill has seen successive delays and push-backs. And with some provisions originally included in the DTC Bill having since been implemented under separate legislation, any new DTC is likely to look rather different.

“Mention of GST and DTC rollout in the speech didn’t surprise me,” said Mukesh Butani, managing partner at BMR Legal. “He has agreed to put out the reworked DTC for public debate. I anticipate that the new version would see substantial changes.”

Chidambaram said he hopes both the DTC and GST Bills will be passed in 2014/15. Butani said this will depend, to a certain extent, on political mandates.

“GST will be on the next government’s agenda and will entirely depend on the political mandate as the implementation is contingent upon constitutional amendment,” said Butani. “Recommendations of the Tax Administrative Reforms Commission (TARC) would be keenly awaited, though there was no mention in the interim Budget.”

In December, Chidambaram spoke exclusively with International Tax Review to say the DTC Bill was ready and that he hoped to get it passed in the winter parliamentary session.

“The DTC is ready and if we are able to pass the Bill before the expiry of the term of Parliament then that would be [my biggest] achievement,” said Chidambaram. “In the past 12 months, I have put in long hours finalising the DTC.”

But when it became clear that the Bill would not be passed, fresh doubts emerged as to whether the new code would ever be adopted.

“India has to wait until a newly-elected government takes up DTC for final enactment. With yet another postponement, it is unclear whether the new tax legislation will see the light of day,” said Sagar Wagh, international tax and transfer pricing specialist based in Mumbai. “Enactment of DTC into the Act will now be fully within the domain of the newly-elected government.”

Stakeholders now have a chance to influence the new shape of the DTC, with comments being invited now that the code has been published on the government’s website.

More from across our site

Multinational enterprises run the risk of hefty penalties if the company in question fails to register for VAT when providing electronic services in South Africa.
Tax directors have urged companies to ensure they have robust tax risk management controls when outsourcing tax functions.
Japan reports a windfall from all types of taxes after the government revised its stimulus package. This could lead to greater corporate tax incentives for businesses.
Sources at Netflix, the European Commission and elsewhere consider the impact of incoming legislation to regulate tax advice in the EU – if it ever comes to pass.
This week European Commission officials consider legal loopholes to secure minimum corporate taxation, while Cisco and Microsoft shareholders call for tax transparency.
The fast-food company’s tax settlement with French authorities strengthens the need for businesses to review their TP arrangements and documentation.
The full ALP model will be adopted through a new TP regime, which is set to boost the country’s investments and tax certainty.
Tax professionals have called on the UK government to reconsider its online sales tax as it would affect the economy at the worst time.
Tax professionals have called on companies to act urgently to meet e-invoicing compliance targets as the EU plans to ramp up digitisation.
In the wake of India’s ambitious 25-year plan for economic growth, ITR has partnered with leading tax commentators to discuss what the future will look like for India and for the rest of the world.
We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree