Budget 2021: Health & education cess could go up this year, says EY’s Sudhir Kapadia

In an interview with CNBC-TV18’s Dinesh Kanabar CEO at Dhruva Advisors, Sudhir Kapadia, National Tax Leader at EY and Rajeev Dimri, National Head of Tax at KPMG in India gave their take on Nirmala Sitharaman’s Union Budget and their expectations on tax front.

On COVID cess Sudhir Kapadia said, “There is a health and education cess combined which the late Mr. Arun Jaitley from 3 percent made it 4 percent in a particular year. In a year like this it is not unexpected to see that going up to 5 or even 6 percent but hopefully only for a year or two.”

“Whatever reforms, in design of a tax structure whether it is corporate or personal were required for the near future I think the government has done before COVID, so to expect anything dramatic on that front, I don’t think is realistic, particularly when the revenues are going to be a very constraint.”

Dinesh Kanabar said, “There has been a dispute resolution scheme which The Akhilesh Ranjan committee has recommended and I would sincerely hope the finance minister can bring that in because you cannot reduce the rate of tax but if you can really bring down the uncertainty and bring down the items in litigation then you are sending a very strong message.”

Rajeev Dimri said, “Customs is an area where the disputes are as many and the dispute resolution or dispute settlement scheme has not come so it does have the potential of unlocking some revenue so Customs is an area where the dispute settlement scheme is needed and could also unlock some revenue.”