New Delhi: A Special Task Force (STF) constituted in November 2017 and restructured in November 2018 to redraft direct tax laws, is yet to achieve anything substantial, as, according to sources, members of the task force have not held any meeting after it received a three-month extension in February this year for submitting a report.
A source close to the Income Tax (I-T) department told The Sunday Guardian: “Despite missing several deadlines in the past, STF members have not convened any meetings in the last three months. The new deadline for submission of the report is 28 May.”
The source added: “The STF is going to seek another extension and is waiting for the Lok Sabha elections to be over. The extension plea may come by the end of June or by the first week of July.”
Speaking on the issue, a senior taxman told The Sunday Guardian, “Even after the task force submits the report, it may take time for the next government to deliberate upon and accept the proposed changes as direct tax laws are complex and take time to deliberate upon.”
Committed to reforming the country’s existing 50-year-old direct tax structure, the Ministry of Finance headed by Arun Jaitley had assigned a six-member STF in November 2017 to redraft the direct tax laws on the lines of prevalent norms in other countries by incorporating the best available practices across the world to meet the current economic needs of the country.
According to the same senior taxman, the STF was initially supposed to submit its report to the government within six months, by 22 May 2018, but after failing to table the report, on 22 May last year, the Ministry of Finance extended the term of the task force by another three months till 22 August. The STF did not submit the report within that deadline too. Later, the then convenor of the STF, Arbind Modi, retired on 30 September 2018, thus further delaying the report of the task force.
Following this, Akhilesh Ranjan was appointed as the convenor of the STF in November last year and was asked to submit its report by 28 February this year, but the task force failed to meet the deadline. The STF sought an extension of three months which later got the government’s nod.
Besides Ranjan, other members of the task force include Girish Ahuja, non-official director of the State Bank of India and chartered accountant; Rajiv Memani, Chairman and Regional Managing Partner, Ernst & Young; Mukesh Patel, tax advocate, Ahmedabad; Mansi Kedia, consultant, Indian Council for Research on International Economic Relations; and G.C. Srivastava, a retired IRS officer.
The United Progressive Alliance government had also initiated reforms in direct tax laws and the Direct Taxes Code (DTC) Bill was introduced in Parliament in 2010 accordingly, but it lapsed due to the dissolution of the 15th Lok Sabha.
The Narendra Modi government has so far attempted many reforms, ranging from phasing out of corporate tax concessions to reduction in corporate tax rates for small businesses to 25% and giving relief to small income earners by lowering tax rates.