The Post Budget Comments From Various Partners Working With Khaitan & Co

The post budget comments from various Partners working with Khaitan & Co., one of India’s leading full service law firms.

GST to be operational in India from August 

“GST Framework and computer system to process GST transactions will be ready by August. GST will be introduced in consultation with states later. Govt has shown its commitment to indirect tax reform.”

Nihal Kothari, Executive Director, GST 

• A standing committee to review the possibility of a common tax code for service tax and central excise tax

“Yes .This is a positive step to simplify central taxes and align to GST”.

Nihal Kothari, Executive Director, GST

  “Formation of standing committee is also an indirect acknowledgment of the delay in GST implementation. Common tax code for service tax and central excise tax would be replaced by GST, thus likely to be short lived.”

Dinesh Kumar Agrawal, Executive Director, GST

• No change in the corporate tax slabs

“This is as it was expected. However, it is proposed to give some concessions, such as reduce the cascading effect of dividend distribution tax, extend concessional rate of 15% on dividends received from foreign companies for another one year, increase in weighted average deduction for R&D expenses, removal of restriction on pass through status to a VCF or VCC  with restriction on investment in 9 sectors and some more concession on ECB withholding tax as also relaxation on end use of ECB for infrastructure are positive announcements. “

Daksha Baxi, Executive Director, GST

• Allowing QFI (Qualified Foreign Investors) to invest in the Indian corporate bond markets

“This will increase availability of funds to corporates and their ability to make larger investments.”

Daksha Baxi, Executive Director, GST

• Provision for advanced pricing agreement in DTC to be in Financial Bill

“This is a much needed provision and is very welcome. It should reduce uncertainty pertaining to taxation of related party transactions and reduce litigation in this regard substantially. Today, about 60% of the tax litigation is on account of ‘Transfer Pricing’ regulations. Having a well-defined APA mechanism in place will provide certainty to the taxpayers in terms of where they stand for the possible tax liability in India.”

Sanjay Sanghvi,  Partner, GST

• Launch of the Rajiv Gandhi Equity Saving Scheme

“This would increase the incentive for retail and small savings. Coupled with widened tax slabs which would give more post tax income in the hands of individuals, this concession should achieve its objective.”

Daksha Baxi, Executive Director, GST