Tax revamp to boost investments: CBEC chief

He also called for re-engineering of the Indian corporate sector to take advantage of the new indirect tax structure. Finance Minister Yashwant Sinha in the Union Budget had reduced the number of excise duty rates from 12 to three while that of custom duty rates was reduced from seven to five.

“However, the overall impact of the new proposal is neutral as additional revenues from it are expected to be around Rs 79 crore in 1999-2000,” he said. He said if there were any anomalies in the new proposals for certain industries, government would look into them.

The CBEC chairman said since the liberalisation period started there has been drastic cut in tax rates but the revenues have not increased at the same pace.

Earlier in the meeting with the chamber members, Central Board of Direct Taxes (CBDT) chairman Ravi Kant hoped there would not be further changes in income tax over the next few years as amendments in Budget 1999-2000 has been made taking into account the ongoing transformation in the economy.

He said the major objective of CBDT would be to widen the tax base to generate additional revenues. "Industry should not talk of tax cuts but should help the government find various sources of tax revenues", he said.

But he said there should not be regular changes in tax policies as a stable policy would help in more transparency and reducing tax litigations.

CBDT chief said income tax rates had settled down at current levels and additional surcharge of 10 per cent levied in the Budget was only a temporary mechanism. But he ruled out roll-back of the surcharge as demanded by some sections of the industry.