Finance Minister Arun Jaitley on Tuesday said the Indian government has resolved various legacy issues with regard to taxation and is gradually working to bring down the corporate tax rates to the global level at 25 per cent from 30 per cent currently.
Speaking on the theme of Reimagining the Indian economy at the SP Jain Institute of Global Management here, Jaitley expressed confidence that the long-pending Goods and Services Tax (GST) would get the approval of Parliament soon.
The minister further said that India achieved over 7.5 per cent growth rate despite global headwinds and the effort of the government would be to improve it further by promoting ease of doing business and attracting more foreign investment and preventing domestic investors from going abroad.
One of the more important areas had been to bring Indias taxation system compatible with global standards. Therefore, we are now working on direct tax systems where we want to put the disputes behind us.
We want people to clean up their tax issues. And therefore, in this Budget I have also suggested various windows of clearing up pending disputes, Jaitley said.
He said the government is working to bring down Indias corporate tax rates gradually to a fair international level which will involve no discretion, no rent-seeking exemption, phasing all of them out gradually and then bringing taxation rate to a flat 25 per cent.
The Budget 2016-17 has provided for dispute resolution windows under which companies facing tax demands, which are stuck at various stages, can pay principal and interest or penalty and put an end to it.
As regards companies facing tax demands out of retrospective amendments, the Budget has provided a scheme under which interest and penalty has been waived off and firms can pay only the principal tax demand and settle the dispute.
On Goods and Services Tax (GST), Jaitley said one uniform common tax for whole of India, which converts the country into one big market and allows transfer of goods and services to take place across this large market, is pending before Parliament.
I am quite certain and we are reasonably moving towards a situation where we should be sooner than later be able to clear this... in Parliament, he said.
The indirect tax reform GST is stuck in the Rajya Sabha where the ruling NDA does not have a majority. Congress has been seeking three changes in the bill, including a constitutional cap on GST rate.
The GST bill is likely to come up for discussion in the second leg of Budget session beginning April 25. .