The Hindu : IT exemptions being reviewed, says Jaswant

Online edition of India's National Newspaper
Wednesday, Jul 16, 2003

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IT exemptions being reviewed, says Jaswant

By Our Special Correspondent

NEW DELHI JULY 15. The Finance Minister, Jaswant Singh, today disclosed that the Revenue Department was reviewing income tax exemptions to remove those which had outlived their utility. This exercise would be completed by September.

Inaugurating a conference of the Chief Commissioners and the Directors-General of Income Tax and Excise and Customs here, Mr. Singh said that a national income tax tribunal would be set up along with benches for rendering uniform decisions. "The Income Tax Act is an all-India legislation and the law should be interpreted and implemented in a uniform manner throughout the country." The institution of ombudsman for direct taxes would also be put in place.

For speedy disposal of cases within six months, 50 additional benches of income tax appellate tribunals would be set up all over the country.

"I have instructed that searches should be authorised only where credible evidence of substantial tax evasion exists. Search and seizure should be resorted to with great care and utmost caution; to be undertaken only with orders issued by the Director-General (Investigations)," he said.

In case of IT returns, Mr. Singh said the number of forms had been reduced from 42 to 22 after the latest budget and this would be further reduced to 10. As for refunds, all claims arising out of returns filed up to December 31, 2002 had been cleared and that amounted to Rs. 12,000 crores.

Another point raised by the Minister pertained to the powers of the Chief Commissioners to compound offences. Terming the guidelines in this regard as a "little restrictive," he called for making compounding easier. "Why have 27,000 cases been pending on this account alone. I have, therefore, already given instructions to reduce the compounding fees and simplify procedures. Similarly on indirect taxes, it is proposed to devise a scheme for the compounding of offences on payment of full dues and penalties not exceeding five per cent of the full duty."

About indirect taxes, Mr. Singh said the Central Board of Excise and Customs would have a complete "on-line" assessment system in place by December 2004.

However, he asked the officers of Excise and Customs to deliberate on procedural reforms by keeping a delicate balance between revenue collections and genuine grievances of the tax-payers.

Earlier, Mr. Singh told the tax administrators that while this year the tax collections would contribute 42 per cent of the total budgetary outlay, this was expected to grow to about 63 per cent by 2006-07. While this significant contribution helped in nation-building, the Government's dependence on market borrowings was too large even now.

For this year, market borrowings were slated to be Rs. 1,50,000 crores and despite projections of better revenue realisation and cutting of avoidable expenditure, the borrowings would still be Rs. 1,30,000 crores in 2006-07.

"Therefore, attempts have to be made to reduce this dependence on huge market borrowings to fund out budgetary requirements through mobilising more revenue without frightening the tax payer," the Minister said.

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