New Delhi: The government plans to introduce the Direct Taxes Code (DTC) Bill, that will replace the archaic Income Tax Act, in the current Monsoon session of Parliament, reports PTI quoting a key finance ministry official.
"We do expect the DTC to be introduced in Parliament in this session," revenue secretary Sunil Mitra told reporters on the sidelines of a CII event.
The current session of Parliament ends on 31st August.
Mr Mukherjee in his Budget speech had indicated the Centre's intention to implement the DTC from 1 April, 2011.
After holding discussion with the industry and other stakeholders the government came out with a revised DTC draft in June.
The DTC, on which the government had invited public comments twice, will replace the archaic Income Tax Act, 1961.
DTC and Goods and Services Tax (GST) are the two major tax reforms that the government is aiming to introduce by 1 April, 2011.
DTC aims at reducing tax rates, but expanding the tax base by minimising exemptions.
Last month finance minister Pranab Mukherjee had said the government would introduce the DTC Bill in the monsoon session of Parliament.
He said that the new direct tax law, which seeks to substantially change the direct taxes regime, will make "Indian trade and industry globally competitive.
The regulator wants to make sure that fund houses are not distributing commissions from investors’ pockets
Market watchdog Securities and Exchange Board of India (SEBI) has once again turned the heat on mutual fund distributors. The regulator has sought details of commissions paid out to distributors over the last 10 months from asset management companies (AMCs). Some fund houses have already submitted this information to the regulator while others are in the process of doing so. According to industry sources, the regulator wants to ensure that AMCs are complying with SEBI's recent diktat which disallowed fund houses to disburse upfront commissions from the load account. AMCs had to comply with this rule from 1 April 2010.
"We are not paying commission from the load account. The problem is peculiar with fund houses which are in existence since the last 7-10 years. Their load accounts will be heavy. AMCs which have entered the business recently will neither have many schemes nor much money in their load accounts," said an official from a mid-sized fund house. Typically, it is Unit Trust of India that can pay a lot of money from its load accounts.
Equity schemes come with a lock-in period of one year while equity-linked saving schemes (ELSS) have a three-year lock-in period. If an investor exits the scheme before this lock-in period, the fund house charges 1% exit load. This money is stored in the load account and is utilised for investors' benefit. SEBI has been asking fund companies to carry out investor education programmes with this money.
There are variants of incentive structures like age-wise (tenure of investment holdings) and target-wise commission (among others) which are offered to intermediaries. Big fund houses that are ready to push their funds by going that extra mile are paying money from their own pockets. The distribution of schemes is carried out by filtering the top performing schemes. The schemes which have a consistent track record are pushed. Some industry players say that national distributors are only pushing schemes of a few fund houses which are ready to pay a handsome commission in return for sales.
Distributors are now paid 45 to 75 basis points (bps) trail commission depending on the fund house. Moneylife had earlier reported on how fund houses were offering upfront commission to the tune of 2%-3% under ELSS.
New Delhi: The much awaited new indirect tax regime Goods and Service Tax (GST) is unlikely to be implemented from the scheduled date of 1 April, 2011, reports PTI quoting a top government official.
"In all probability it (the introduction of GST) will miss the deadline," revenue secretary Sunil Mitra told PTI.
GST is expected to replace excise duty, service tax on the Centre's end and value-added tax (VAT) on the states front, besides local levies, cesses and surcharges.
He, however, did not say when the GST will actually come into effect.
Mr Mitra said the Constitution Amendment Bill on GST may not be tabled in the ongoing monsoon session of Parliament as there is no consensus on the issue. The session ends on 31st August.
"We had hoped if we had such an agreement (with states on GST Constitutional Amendment Bill) then we would be able to introduce the amendment in the present session. Now it is not possible," Mr Mitra said.
The BJP-ruled states and a few other states have been opposing the revised draft of the Constitution Amendment Bill on GST and sought one month more to build their views more firmly.
Mr Mitra said if the draft Bill was introduced in the monsoon session, then after discussion and deliberation, it could have been voted in the Budget session in February.
"If we could set (constitutional amendment bill) in (monsoon session) it could have been examined by select committee and could be voted in the Winter Session.
"If it was voted and accepted then we would have time for ratification by 50% state and for introduction of legislation, GST legislation and Central legislation, which could then be debated, discussed and perhaps voted in the budget session," he said.
In his meeting with the state GST panel last week, finance minister Pranab Mukherjee had emphasised the introduction of the Bill in the Monsoon Session and said the discussions between the Centre and states could run parallel.
The BJP-ruled states had objected to the revised draft of the GST, saying it does not clarify how the changes will be brought about in the GST structure.
The earlier draft was rejected by the states on account of the proposed vesting of veto powers with the Union finance minister on state taxation issues.
The first draft had proposed setting up a GST Council to take decisions on GST with the consent of the Union finance minister and a two-third majority of states.
The revised draft, however, said the council could take a decision only when there is a consensus.
However, BJP-ruled states wanted to know the clear meaning of consensus and suggested changing this word with "consent". Both the drafts have also suggested a Dispute Settlement Mechanism.
Mr Mukherjee had said a third revised draft would be prepared to sort out states' concerns.
The state finance ministers are likely to meet in early September to sort out the issue.