After his meeting with German Chancellor Angela Merkel in Bangalore, Prime Minister Narendra Modi expressed hopes of rolling out Goods and Services Tax (GST) by early 2016.
Modi addressed Indian and German business leaders and said, "We have introduced GST bill in Parliament and hope to roll it out in 2016." The Bill has already been approved by the Lok Sabha and is pending in the Rajya Sabha, where the ruling NDA does not have a majority and faces opposition.
After its approval by Parliament, half of the state legislatures too need to approve the Constitutional Amendment Bill to bring a GST as a replacement to all indirect taxes.
Modi said the government has taken decisive steps to remove long pending concerns of investors. "We have clearly articulated that we will not resort to retrospective taxation."
This position has been reinforced by not going for imposition of MAT on foreign portfolio investors, he said. "We have also decided to defer the implementation of the general anti avoidance rules (GAAR) for 2 years."
Stating that a series of measures taken during the 15 months of BJP rule has restored credibility of India in eyes of global players, he said the government was speeding up regulatory clearances, reducing licensing requirements in the defence sector and making tax policy more consistent.
Validity period of industrial licences has been increased, defence items de-licensed and a number of restrictions like end use certificate has been liberalised, he said.
"We have increased the validity period of defence industrial licences up to to 18 years from 3 years," he said, adding that regulation for alternative investment funds allowing foreign investments in such funds has been notified.
Also capital gains tax regime for real estate investment trusts has been rationalised.