Centre sets up study team to evolve common tax code

The government has set up a ‘Study Team', headed by M. K. Gupta, former Vice-Chairman of the Customs and Central Excise Settlement Commission, to look into the possibility of evolving a common tax code for service tax and Central excise duty, which could be adopted to harmonise the two legislations under the proposed Goods and Services Tax (GST). The team is to submit its report to the Finance Minister by September 30. As per the announcement by Finance Minister Pranab Mukherjee in his budget speech, 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),” a Finance Ministry statement said here on Monday. Input tax credits The Study Team has also been directed to address issues relating to input tax credits so as to simplify the existing scheme and mitigate the cascading impact of levies to the extent possible. At the same time, another prime objective is to harmonise the existing procedures and processes and 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,” the statement said. As part of its efforts, the study team under the leadership of Mr. Gupta — a retired Indian Revenue Service (IRS) officer who is “recognised for his in-depth knowledge and sound understanding” of service tax and central excise law and procedures — will interact with various chambers of commerce and industry associations, representing various segments of the services and manufacturing sectors, as may be required. Keywords: common tax code, GST, Pranab Mukherjee