Indian tax authorities have constituted a study team to examine the feasibility for drafting a common tax code for service tax and central excise, which would be adopted to harmonise the two legislations in India. Tax experts told Business Recorder here on Friday that the Indian tax department has set up a study team on common tax code for central excise and service tax.
The study team would also suggest any other measure that will help reduce the cost of compliance for business or transition towards a comprehensive service. Details revealed that as announced by the Indian Finance Minister in his last Budget speech, a study team has been set up by the government, under the leadership of M K Gupta to examine the possibility of a common tax code for service tax and central excise, which could be adopted to harmonise the two legislations.
The study team will examine the feasibility and also suggest a draft common tax code for service tax and central excise that can be implemented under the present Constitutional scheme, keeping in view the challenges in the context of impending Goods and Service Tax (GST). The study team has also been directed to address issues relating to input tax credits with a view to simplifying the existing scheme and to mitigate cascading to the extent possible, and to harmonize existing procedures and processes to make them more trade friendly. The study team may also suggest any other measure that will help in reducing the cost of compliance for business or transition towards a comprehensive GST.
Shri M K Gupta, former vice-Chairman of the Customs and Central Excise Settlement Commission, is widely recognised for his in-depth knowledge and sound understanding of service tax and central excise law and procedure.
As part of its efforts, the study team will interact with various chambers of commerce and industry and recognised business and industry associations representing various segments of the services and manufacturing sector, as may be required. Indian tax authorities have directed the study team to submit its report by September 30, 2012, tax experts added.