Encouraging to see implementation of pending reforms: Dinesh Kanabar

“The Finance Minister presented the Union Budget today amidst scepticism over the growth agenda of the government. It is, therefore, indeed heartening to see the FM devote a good portion of his Budget speech to making a commitment to implement the pending reforms initiatives," said Dinesh Kanabar, Deputy CEO and Chairman Tax, KPMG.

He added: "The FM did well to commit that the financial sector reforms will be taken to their logical conclusion. He assured the tabling of the provisions for the introduction of the Additional Banking Licences to Corporates. He has also assured the tabling of the long-pending Companies Billing."
 
Kanabar said the proposal to permit FDI in mutual funds was a big ticket reform and can be the response to the decline in the growth of FDI in the recent past.
 
"The proposals to simplify the refund of Service Tax is very welcome given that huge refunds have been stuck up in procedural delays. The reiteration of the government to GST is also welcome. Of course, the tabling of Constitution Amendment Bill is just a step in this direction and buy-in of the states will be needed to implement this."
 
Kanabar isn't enthused at the imposition of MAT on SEZ developers and units and termed the move 'retrograde' as it "seeks to impose tax on income received from investments made with a commitment of tax exemption". "This," he added, "is advancing the negative impact of the Direct Taxes Code and should have been avoided. "
 
He, however, welcomed the reduction of tax on foreign dividends received from subsidiaries of Indian companies and marginal relief provided to individual tax payers is also welcome.
 
"The proposal for infrastructure bonds of Rs 30,000 crore and the additional tax incentive to subscribers upto Rs 20,000 is a step in the right direction but a lot more needs to be done if this sector is to develop a thrust."