Date:06/09/2005 URL: http://www.thehindubusinessline.com/2005/09/06/stories/2005090600950300.htm

Back CAs, industry groups to have a say in new income-tax code

K. R. Srivats

New Delhi , Sept 5

INDIA Inc, industry associations, income-tax experts and chartered accountants may get to have a say in the framing of the new income-tax code. The Finance Ministry has promised that chartered accountants and the other stakeholders would be consulted at an appropriate stage in the ongoing process of drafting a new, simplified income-tax law.

As part of the efforts towards evolving a simplified income-tax code, the Central Board of Direct Taxes (CBDT) has already established an internal committee to come up with recommendations for a new income-tax law.

After the internal committee got set up, industry circles and tax professionals have been apprehensive that they may not be able to make any submissions on the proposed law.

"We have already started work on a simplified income-tax code. We have set up an internal committee. Once that committee comes out with certain recommendations, at that stage, we will consult the Institute of Chartered Accountants of India (ICAI) and other stakeholders. Then, we can put in place an easy-to-understand tax code that at the same time serves the purpose," a senior Finance Ministry official said.

The Finance Minister, Mr P. Chidambaram, had said in his Budget speech for 2005-06 that in due course, he intended to place before Parliament a new and simplified income-tax Bill. The ministry feels that the current income-tax law is too cluttered and thus, it needs to be modified.

Meanwhile, the Revenue Secretary, Mr K. M. Chandrasekhar, indicated recently that the information systems being developed for the CBDT and the Central Board of Excise and Customs (CBEC) would be integrated with the TINXSYS, which is the computer network being developed by the States for sharing information under the VAT regime.

This proposed move is meant to ensure a good information flow that would enable the Revenue Department to extend better services to the taxpayer. It would also create a stronger information base for the tax authorities, whether from the Union Government or the State Governments.

The Revenue Secretary added that the Government is looking at simplifying trade facilitation measures. He said that an electronic data interchange (EDI) system is being developed in all the ports.

Further, a risk management module that would substantially increase the flow of trade through the green channel from the present level of 25-30 per cent to 75-80 per cent is also being developed.

Stating that these are time-bound projects, the Revenue Secretary expressed confidence that they would be completed in the next few years.