TAXATION AND TAX REFORMS
The 2 major taxes that will be the backbone of the economy are Income Tax, and Goods and Services Tax. Congress reiterates its firm belief that the principles underlying these taxes should be simplicity, transparency and, progressivity. Besides, a good tax administration must place trust in, and enjoy the trust of, taxpayers. Congress will put an end to the tax terrorism unleashed by the BJP government that has put uncertainty and fear in the minds of individuals and businesses.
Direct Taxes Code
- Congress promises to enact the Direct Taxes Code in the first year of our government. It will usher in an era of simplicity, transparency, tax equity, easy compliance and impartial administration.
- Congress promises that the Direct Taxes Code will levy taxes at reasonable and progressive rates having regard to the level of current incomes, income inequalities, and the principles of tax equity.
Goods & Services Tax 2.0
- Congress promises to review and replace the current GST laws with the GST 2.0 regime that will truly reflect the intent and purpose of a non-cascading, value-added, indirect tax.
- The GST 2.0 regime will be based on a single, moderate, standard rate of tax on all goods and services. The rate will be revenue neutral to the current indirect tax revenues of the Central and State Governments and will take note of the potential of GST 2.0 to boost their tax revenues.
- The GST 2.0 regime will levy a special rate of duty on demerit goods.
- GST 2.0 will be easy to administer, easy to understand by the taxpayer, and easy to comply with. We are confident that GST 2.0 will promote growth, new businesses and employment. The website under GST 2.0 will be re-designed and made user-friendly with inputs from the taxpayers.
- Congress promises that Real Estate (all sectors), Petroleum Products, Tobacco and Liquor will be brought within the ambit of GST 2.0 in a manner and time period not exceeding 2 years as agreed to in the GST Council.
- Essential goods of mass consumption (such as food grains, lifesaving drugs, vaccines, etc.) and essential services will be exempted from GST 2.0 or zero-rated.
- All goods and services that are exported will be zero-rated and not subject to GST 2.0.
- Congress promises that threshold exemption for small businesses will not be affected by inter-state supply of goods or services.
- In order to support small, unregistered businesses that supply goods and services, there will be no GST liability on the purchaser through the reverse charge mechanism.
- Congress promises to abolish the e-way bill. Tax evasion will be detected through the risk management mechanism and strengthening the intelligence machinery.
- Congress will endeavor to allocate a share of GST revenues to Panchayats and Municipalities.
- Congress promises that a taxpayer will be required to file a simple, single quarterly return for his/her business and an annual return. Every tax payer will be subject to assessment by a single authority based upon turnover.
- The GST Council will be the policy-making body and will be served by a permanent secretariat of tax economists, tax policy experts and tax professionals. Its minutes will be put in the public domain.
Congress promises that the DTC and GST 2.0 will be essentially civil laws and any violations will attract civil penalties that will be proportionate to the tax evaded. Prosecution under DTC and GST 2.0 will be only in cases of criminal conspiracy, corruption, or fraud.