No decision yet on imposing tax on cash transactions: Shaktikanta Das
The Andhra Pradesh Chief Minister Chandrababu Naidu-headed committee on digitisation had in its report last month recommended a levy on cash deals beyond Rs 50,000 as it sought to discourage the use of physical currency.
New Delhi: The government has not taken any decision on levying a Banking Cash Transaction Tax (BCTT) on cash deals of Rs 50,000 and above as suggested by the high- powered Chief Ministers' panel, Economic Affairs Secretary Shaktikanta Das said today.
Besides, expressing hope that GDP growth would be upwards of 7 percent next fiscal, he said that reduction in corporate tax cannot be done overnight but in phases because of fiscal constraint.
"Some suggestions have come (on imposing tax on cash transactions)... The government has not taken any decision on the recommendation of Chief Ministers' panel. The government will go through the report very carefully and take appropriate decision," he said.
The Andhra Pradesh Chief Minister Chandrababu Naidu-headed committee on digitisation had in its report last month recommended a cap on cash in all types of big-ticket
transactions and a levy on cash deals beyond Rs 50,000 as it sought to discourage the use of physical currency.
On tax rate, Das said: "Two years ago the Finance Minister had announced that the corporate taxes will be reduced...but the government also has certain fiscal constraints. It is difficult to reduce the tax rates overnight to 25 percent because the fiscal cost will be very high and he government will not be able to do justice to various other sectors of the economy."
It is dependent on the financial affordability of the government without compromising the spending requirements in various critical sectors like infrastructure, he said at an event organised here by industry body Assocham. On the back of various policy measures undertaken by the government, the economy growth would be over 7 percent next year, he said.
"So far as the next year is concerned I think the outlook is very positive despite some talk of some uncertainty which is seen in some parts of the world. We would expect the growth to be upwards of 7 percent on the back of various policy measures that have been taken by the government," he said.
"In less than 90 days, the whole process of remonetisation is almost complete. This speaks volumes about the way the remonetisation has been completed," he said.
RBI will soon circulate new one rupee notes with a multicoloured look while the existing currency notes will also continue to be legal tender.
Questioning the methodology adopted by Moody's, Finance Ministry today said the global agency has ignored reforms initiated by the government and it should not wait "till infinity" for them to take root before upgrading the country's sovereign rating.