No decision yet on imposing tax on cash transactions in India

NEW DELHI (INDIA): The government of India 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.nnBesides, expressing hope that GDP growth would be upwards of 7 per cent next fiscal, he said that reduction in corporate tax cannot be done overnight but in phases because of fiscal constraint.nn”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.nnThe 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.nnOn 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 per cent 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.”nnIt 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.nnOn the back of various policy measures undertaken by the government, the economy growth would be over 7 per cent next year, he said.nn”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 per cent on the back of various policy measures that have been taken by the government,” he said.nnSource: Press Trust of India