New Delhi: GST and Land Bill: The government is taking up Goods and Services Tax (GST) and Land Bill on priority. “We are in the process of creating history by bringing about the most important indirect tax reform,” he said. “Our priority is to get the GST and land bills passed by Parliament,” he added.

He advocated for RBI to cut interest rates by 25 basis points in its next monetary policy. “It is,” said Jaitley, when asked whether the time is right for the Reserve Bank of India (RBI) to effect an interest rate cut.

The government is looking at strategic sale of stakes in state-run companies to meet its target of raising funds from asset sales. Jaitley said that the government will be going for strategic sale as well as disinvestment to raise revenue. He said that he had proposals for secondary divestment for over 50 thousand crores. “Apart from this, many ministries have approached me for disinvestment in their non-core sectors and we are looking at it. Our decision will be balanced and the process will be to divest or make a strategic sale as the case demands,” he said.

Jaitley said that the corporate tax needs to be brought down to global levels. Currently the corporate tax stands at 30 per cent which needs to be brought down to 25 per cent, as announced in the annual Budget. “We must … remove discretion, phase out exemptions and bring the effective rate (corporate tax rate) down to global levels,” he said.

On Minimum Alternate Tax (MAT) issue the Finance Minister said that it will be resolved through judicial procedure. “It would have been better if the judicial authority in 2012 could have reached a resolution. I have stopped it (MAT on foreign investors) from April 1, 2015. However, old issues will have to be resolved through judicial process,” he said. Constituting the three-member A P Shah Committee that will look into MAT demand on FIIs, the government had on Wednesday named former CEA Ashok Lahiri as a member of the panel which will “expeditiously” suggest ways to resolve the dispute.
The Finance Ministry also said other tax issues would be also referred to the three-member committee in due course. Renowned chartered accountant Girish Ahuja is the third member of the panel, whose term is one year.

The Income Tax Department had sent notices to 68 foreign institutional investors (FIIs) demanding Rs 602.83 crore as MAT dues of previous years. This has raked up a big controversy, with FIIs moving higher court challenging the MAT (minimum alternate tax) demand. The Shah committee will examine MAT notices for the period prior to April 1, 2015, a Finance Ministry statement said, adding the committee has been requested to “give its recommendations expeditiously”. “As initially the committee would focus on the issue of MAT on FIIs for giving its report expeditiously, other issues to be referred to the committee will be notified in due course,” it added. The committee will examine all the related legal provisions, judicial/quasi judicial pronouncements. Finance Minister Arun Jaitley in Budget 2015-16 has exempted FIIs from paying MAT with effect from April 1, 2015. Jaitley had announced setting up of the Shah Committee in Rajya Sabha earlier this month. Besides, MAT issue, the committee would look into few other “legacy” tax cases, he had said.
“The committee may interact with various stakeholders as it may deem fit. The committee may also invite officers from Department of Revenue including CBDT for consultations/ discussions as may be necessary,” it added. Following the announcement of setting up of the panel, the tax department has directed its field officers to put on hold issuance of fresh notices and any further assessments on levy of this tax on such entities. “Issue of fresh notice for reopening of cases as also completion of assessment should also be put on hold unless the case is getting barred by limitation,” a CBDT circular had said.
As FIIs pulled out funds from markets, the Government last month sought to soothe the nerves of jittery foreign investors saying those FIIs coming from countries with which India has a double taxation avoidance pacts would be exempt from the 20 per cent MAT levy.

The compliance window under the Black Money Act, that has already been passed, will be announced in a few days. “Notifications with regard to Black Money Bill will be issued shortly,” he said.

He said the value of the rupee should be market-driven. The rupee has fallen nearly 1 per cent against the US dollar so far this year, despite signs of an improving economy, with analysts predicting India could surpass China’s growth.

But analysts believe the currency is still over-valued in real effective exchange rate (REER) terms, which is calculated on a trade-weighted basis against a basket of 36 currencies and is adjusted for inflation.

The government will increase spending on rural infrastructure and irrigation.

The Center is committed to bring about ‘One Rank One Pension’ for defence personnel.   

The government is in consultations with the RBI on setting up an independent public debt management agency (PDMA).the government was in consultations with the Reserve Bank of India on setting up an independent public debt management agency (PDMA). The comments come after the government last month withdrew proposals to set up the agency, with Jaitley adding then the government would consult with the central bank and unveil a new roadmap. RBI Governor Raghuram Rajan last week denied the central bank was against the idea of a PDMA, and said there was no difference of opinion between the central bank and the government on the issue.