The government has set up a committee to explore the possibility of a common tax code for central excise and service tax that can be adopted to harmonise the two legislations.
The committee under MK Gupta,former vice-chairman of the Customs and Central Excise Settlement Commission,will suggest and draft a Common Tax Code and will submit its report by September-end this year,an official statement said.
Earlier,in the Budget 2012-13,Finance Minister Pranab Mukherjee had announced a study team to harmonise the two legislations.
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, the statement said.
The team will also work towards addressing issues relating to input tax credits for simplifying the existing scheme and mitigating the cascading of the tax.
Various existing processes will also be harmonised and made more trade-friendly,the release said.
Moving towards GST,the panel will also recommend measures that will help in reducing the cost of compliance for business.