Having a perfect system of taxation would continue to be a work in progress. In any case, we can identify ways to develop and work towards implementing a system that is more transparent, less subjective in implementation & administration, so as to promote ease of doing business leading to growth and development of the country’s economy.
New Delhi, 28th September, 2022: Having a perfect system of taxation would continue to be a work in progress. In any case, we can identify ways to develop and work towards implementing a system that is more transparent, less subjective in implementation & administration, so as to promote ease of doing business leading to growth and development of the country’s economy. We have seen a robust growth in collection of direct as well as indirect taxes and the government is looking at enhancing ease of doing business and decriminalization of tax laws as a priority. Shri Vivek Aggarwal, Additional Secretary, Department of Revenue, Ministry of Finance said.
Speaking at an event organised by industry body ASSOCHAM, Shri Vivek Aggarwal further said, “Important issues like simplification of the compoundable criminal provisions in the Income Tax Act, Customs Act and in the GST Act and Threshold limit for criminalization and prosecution of tax evasion is something that needs to be relooked at. Ease of compliance through a single business identity and a single portal for filing different returns is something we are seriously working on and we have reached consensus on many issues like simplifying compounding provisions, reduced discretion, increased thresholds for criminalizing a crime and removing sections that are duplicated in the IT Act, Customs Act and GST Act”.
“We are holding detailed stakeholder’s discussions on various issues like litigation management, reducing backlog of IT appeals, transfer pricing issues, import of services and evasion of tax. Lots of initiatives are being taken on the policy side in consultation with the stakeholders. The role of data and technology will ensure more consistency and transparency on both sides, that of the taxpayers and the system.” he added.
Mr. Kamlesh C Varshney, Joint Secretary (TPL-I), CBDT, Ministry of Finance said, TDS provision was brought in to increase voluntary compliance. The usage of TDS provision in Income Tax laws is inversely proportional to the level of voluntary compliance in a country. Since voluntary compliance is relatively less here as compared to developed countries, we need to use TDS provision to increase voluntary compliance. Due to various steps taken by Govt, voluntary compliance has now gone up.
Mr. Varshney further said, whenever you enact any law, particularly Income Tax law, it tends to become complicated. However, this is not unique to India; it is all over the world.
One welcome change that you must have seen in the last few years is that in Income Tax Act, we have taken power to issue circulars to remove difficulties. Earlier power was only under Section 119, but it has restricted power. We have undertaken this journey for the first time, which is already in place in some of other countries like Australia. The Australia Tax Office (ATO) has power to interpret the law and come out with a binding circular or ruling, said Mr Varshney.
These circulars issued under removal of difficulty clause helps to smoothen the implementation.
When we were drafting TDS Section 194S, which is on crypto exchange, I thought it was going to be the toughest job of my career. But the day we interacted with the industry and came out with a solution, our 194S circular, under the same removal of difficulty clause, is considered as one of the best with no doubts or questions. Everybody is on board on that and it can now be implemented smoothly, noted Mr. Varshney.
Mr. Milind Kothari, Chairman, National Council on International Taxes, ASSOCHAM said, “We are seeing a consistent growth in revenue that exceeds targets and I think India’s time has come as a developed country in the making, This bodes very well for generations to come. There is an increase in compliance, improved efficacy of tax administration and we are getting there as a stable tax regime.
As a country we are at the forefront in taking a digital leapfrog with the largest absorption in the world. We are the largest and fastest growing market for digital consumers in the world which is a great cornerstone of our digital journey. The government is in the fore of driving decisions, transformations for our country. The amount of information available with the government is overwhelming, it possibly gives a pulse of whats happening in the economy better than any other statistics. We are still in a stressed position when it comes to international taxation. Multi-lateral taxation is likely to be under a great amount of stress going forward and bi-lateral taxation resolution will see much faster growth. We are fortunate as a country that our economy is possibly the 5th largest in the world and slated to become the 3rd in a few decades or so, said Mr. Kothari.”
The conference also saw panel discussions on pertinent topics like ‘Section 194R’, ‘Key Emerging International Tax Issues’, Cross border trade & tax implications: three key FTA’s-EU, UK’, ‘GIFT City’, ‘ Global emerging trends’ and ‘Hybrid working & the associated tax issues’ where experts and industry veterans engaged in insightful discussions.
We recognize the efforts of the govt. in making the businesses competitive, creating ease of doing business & bringing certainty in the matters that concern businesses said Mr. Rahul Garg, Chair, ASSOCHAM National Council on direct taxes at the ASSOCHAM 19th Int'l Tax Conference today.
In developing countries like India, where there's always a challenge to build tax capacities to raise more revenue, the tax acts as a backbone for government resources: Mr Rakesh Nangia, Co-chair, ASSOCHAM National Council on International Taxes at the 19th International tax conference.
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