Bill to spruce up non-revenue issues

NEW DELHI: The government will table a new Bill to amend the law on direct and indirect taxes to clean up all non-revenue provisions within the next two months.

Speaking at a post-Budget meeting with industry body Assocham in the capital on Saturday, finance minister P Chidambaram disclosed that the Bill will include provisions on mergers & acquisitions and was aimed at removing the maze of unnecessary provisions that hinder taxpayers and business.

The FM also pitched for higher growth in the economy and stated that GDP growth would be over 7% in the current fiscal.

Addressing members of Assocham the FM said, “All revenue related matters will be cleared in the Finance Bill. All non-revenue related issues, such as those related to M&As, will be taken up separately by way of an amendment Bill.�

This is in addition to the new income tax Bill which is expected to be brought out before January 2006, which would again try to clean up the complex existing structure.

The FM assured that there would be no policy ‘shocks’ and tampering with the tax rates in the next 4-5 years. Addressing captains of the industry, the FM said, “The government’s idea is to provide a stable policy environment so that you don’t have policy shocks. This tax regime will be in place and not be tinkered or tampered with for the next 4-5 years.�

In what was his third meeting with an industry body after presenting the budget early this week, the FM stated that this would be his last such interaction with the industry on a post mortem of the budget. He emphasised that the Budget proposals will lead to more than 7% in the current fiscal and even higher growth in the subsequent year.

“The Budget proposals for 2005-06 will not only spur growth but also prove to be one of the finest engine of growth for the future to come,� according to the minister.

Speaking about the Special Purpose Vehicle (SPV) for the infrastructure sector announced in the budget, he reiterated that the SPV would kick-off in 4-6 weeks. He said that the government has already identified projects in road, ports, airports and tourism to be funded through the SPV route.

The FM also called upon the industry to take up issues of concern that have arisen out of the budget proposals in sectors such as textiles, leather, banking, engineering, manufacturing and gems & jewellery with the authorities in the government.

He assured that if issues are found to be genuine, the concerns will be addressed with priority. Expressing hope that the VAT would be implemented on schedule from April 1, this year the finance minister said that the new tax regime would be tax enhanced rather than tax diminishing.