Even as finance minister Arun Jaitley scrapped the proposed direct taxes code (DTC) in Budget 2015-16, the standing committee on finance has recommended that the new direct tax regime should be introduced within a “stipulated deadline along the lines of the goods and services tax (GST)”.

“The committee desires that the government should go ahead with the DTC with its good provisions and implement the same within a stipulated deadline… while doing so the government would rely on the report of the committee on DTC bill so as to ensure that a flawless legislation is finally enacted,” the panel has said.

The committee’s recommendation comes amid the finance minister, in his Budget speech, announcing that the DTC will not be pursued as most of the provisions of the proposed Code have been incorporated in the existing Act. The enactment of the DTC had been under discussion since 2009 and meanwhile, provisions including concepts like controlled foreign cooperation and general anti-avoidance rules (GAAR) have already been incorporated in the Income Tax Act, 1961. The “very few aspects” which were left out, the minister had said, were being taken up in the current year’s Budget.

However, the standing committee argued that the existing Act is a cumbersome statute, fraught with complexities and several ambiguities prone to “capricious interpretations and avoidable litigation”.

“The committee are not convinced with the reply of the government that there is no great merit in going ahead with the DTC, as it exists today, as most part of the provisions of the DTC have already been included or are proposed to be included in the Income Tax Act,” the parliamentary panel’s report on department of revenue said.

It also questioned the revenue department’s approach of the piecemeal implementation of the Code. The department though concurred that the proposed tax law was in much simpler language, it said, “if you go for a new law will again take years or may be a decade for the jurisprudence, for the case laws to get settled”.