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Kelkar panel to rework consultation paper

Coming under severe criticism from top leaders of the Bharatiya Janata Party and from within the government, the chairman of task forces on tax reforms, Vijay Kelkar, said on Thursday that the panel will "improve" upon the consultation paper when it draws up the final report.

"This is just a consultation paper. We want to improve upon our paper and bring out the final report," Kelkar said on the sidelines of a Ficci seminar on taxation in New Delhi.

He declined to comment whether the final report would dilute some of the harsh measures like lifting all tax exemptions to individuals and corporates.

The task force on direct taxes had suggested lifting of tax incentives on savings while the panel on indirect taxes recommended withdrawing exemptions and capital gains tax along with far-reaching measures to improve procedures.

Some of the BJP leaders have opposed the views on lifting tax incentives on savings as it might go against the interest of salaried class.

Kelkar, however, favoured lifting of indirect tax exemptions saying, "my own preference would be -- if you want to give incentives, give it through budgetary provisions and not through tax exemptions."

While subsidies can be debated in Parliament and is a more transparent way of offering sops, he said tax exemptions cannot be even detected by the Comptroller and Auditor General.

The consultation papers were presented to Finance Minister Jaswant Singh two weeks ago and comments were invited from all sections of the society. After considering the views, the Kelkar panel would draw up the final report by December, which would provide the roadmap to the next budget.

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