TARC recommends government bring back fringe benefit tax

Dated 3rd December, 2014

Rahul Garg, leader of the direct tax practice at consulting firm Pricewaterhouse Coopers, said that currently when the economy is going through a recovery phase, the government should not do anything to destabilize the process. “The most relevant tax reform at this juncture that the government needs to push for is goods and services tax (GST). To bring in an entire new tax concept at this point of time is not a great idea,” he added.

As a last-ditch attempt to form a consensus that would enable the announcement of GST in the budget, finance minister Jaitley has called for a meeting of state finance ministers on 11 December. The government is looking to introduce the GST Bill in the current winter session of Parliament. “We are yet to have consensus on three issues of inclusion/non-inclusion of petroleum products, entry tax and GST compensation funds and we are still having discussions with the states. The finance minister is meeting the state finance ministers on 11 December to iron out those differences and we are hopeful that with the final round of discussion with the states, we will be in a position to take a note to the cabinet and then finally introduce the Bill in the winter session before 24 December,” Rashmi Verma, additional secretary (revenue), finance ministry, said at a conference on Tuesday.

It is not clear if the Bharatiya Janata Party-led National Democratic Alliance will accept the recommendations of the commission that was appointed by its predecessor, the Congress-led United Progressive Alliance.