'Deferment of GAAR will repose industry's faith in tax administration'

The phased decrease in corporate tax and the deferment of General Anti Avoidance Rules (GAAR) will repose the industry's faith in the tax administration, a top official said here on Monday.

Tax Administration Reforms Commission chairman Parthasarathi Shome welcomed the two proposals in the 2015-16 union budget.

"Reduction in corporate tax rate from 30 percent to 25 percent in phased manner over the coming four years and the deferment of GAAR are welcome moves which will repose confidence of the industry in the tax administration," Shome said while chairing a budget analysis session organised by Assocham in association with EY India (as knowledge partner).

Shome said it was high time the government rolled out the clear structure and rates in the proposed goods and services tax regime before the stakeholders for its effective implementation with effect from April 1, 2016.

He said India being a poor emerging nation, there was unequal distribution of wealth.

"At the same time, only Rs.800-900 crores is collected in the form of wealth tax which unnecessarily burdened the taxpayers and tax department with compliance and administration costs. Hence, the move to increase surcharge levy by 2 percent on super-rich taxpayers is justified."