Expenditure Tax Act
“Designed based on economist Nicholas Kaldor's recommendations to tax spending rather than income; failed practically.”
Instituted in 1957 by the Ministry of Finance (CBDT) to govern direct taxation. Aimed at addressing core governance challenges and structural priorities of its era.
Administered under Ministry of Finance (CBDT) through federal coordination, state-level departments, and executive oversight mechanisms.
High administrative cost, harassment of taxpayers, negligible revenue yield, and distortion of consumption.
Income Tax Act adjustments (Re-enacted briefly in 1987 for luxury hotels, then phased out)
Official parliamentary records, ministry gazette notifications, and statutory review committee assessments concerning Expenditure Tax Act.
What Should Be Retained, Redesigned, or Revived?
Status: Terminated. Replacement: Income Tax Act adjustments (Re-enacted briefly in 1987 for luxury hotels, then phased out). Demonstrates the systemic lifecycle of public policy in India—highlighting how changes in state capacity, federal dynamics, and technological capability render legacy frameworks obsolete or require complete legislative overhaul.
Verified Administrative & Evaluation Sources
- Official Gazette of India, Ministry of Finance (CBDT)
- Parliamentary Standing Committee Reports (1966)
- Law Commission of India & Ministry Transition Notes
Related Policy Records in Direct Taxation