The centre government has not taken any decision on imposing 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 stated today.
In addition, expressing hope that GDP growth would be upwards of 7 percent next fiscal, he stated that decrease in corporate tax cannot be done overnight but in phases because of economic constraint.
“Some proposals have come (on imposing the tax on cash transactions)… The government has not taken any decision on the recommendation of Chief Ministers’ panel. The Centre government will go through the report very carefully and take a suitable decision,” he stated.
The AP Chief Minister Chandrababu Naidu-headed committee on digitisation had in its report last month suggested a cap on cash in all types of big-ticket transactions and a tax on cash deals beyond Rs 50,000 as it sought after to discourage the use of physical currency.
On the tax rate, Shaktikanta Das stated: “2 years ago the Finance Minister had proclaimed that the corporate taxes will be reduced…but the centre government also has certain financial constraints. It is difficult to reduce the tax rates overnight to 25 percent because the financial cost will be very high and the government will not be able to do justice to various other sectors of the economy.”
It is dependent on the fiscal affordability of the government without compromising the spending requirements in various serious sectors like infrastructure, he stated 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 stated.
“So far as the next year is concerned I think the outlook is very positive despite some talk of some hesitation which is seen in some parts of the world. We would expect the growth to be upwards of 7 percent on the back of several policy measures that have been taken by the government,” he stated.