The Corporate Affairs Ministry will press ahead with the implementation of global accounting norms IFRS from next fiscal, even if the Direct Taxes Code does not take effect.
"We have taken the initiative that irrespective of whenever the DTC comes we are determined to ensure that IFRS is implemented by April 1, 2013," Corporate Affairs Minister Veerappa Moily said.
According to an earlier roadmap laid by the MCA, companies with a networth of over Rs 1,000 crore were to converge their account books as per IFRS from April 1, 2011, but lack of clarity on tax-related issues had pushed the date for implementation.
One of the key contentions was the issue of Minimum Alternate Tax (MAT) under the DTC regime. The DTC Bill, which was introduced in Parliament last year, proposes to replace the 50-year old Income Tax Act. It is also set to be implemented from April 1, 2013. The new accounting standards are considered to be more reliable, consistent and uniform and are meant to enhance the credibility of businesses by incorporating more disclosures that lead to good corporate governance.
"Reforms in the processes of doing business in India are vital to keep pace with changing times and global trends, more so as we are currently ranked lower in the global index on ease of doing business," Moily said.
He added, "Realising this we have hastened the pace of reform process to effectively address the current challenges faced by the domestic corporate sector." The new standards are considered to be more reliable, consistent and uniform and are meant to enhance the credibility of businesses by incorporating more disclosures that lead to good corporate governance.
He reiterated that the new Companies Bill come before Parliament in the current Monsoon Session. "The basic premise of the Bill under the enactment is good corporate governance which is also the modern civilisation we must adopt," he said.
He added that the ministry has set up committee to recommend short, medium and long term process reforms at the central and state levels to enhance institutional capability for effective delivery of core services together with an inclusive economic growth process.