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Govt to focus on improving tax compliance

Author: PTI/Wednesday, January 2, 2019/Categories: Tax

Govt to focus on improving tax compliance

New Delhi - The government is looking at bringing untaxed sectors in the tax net as well as improving compliance to raise the tax-to-GDP ratio, revenue secretary Ajay Bhushan Pandey said.

He also said GST officials would ensure that taxpayers who are paying taxes honestly are not disturbed, but those who are defaulting in payment or not filing returns should be brought within the tax fold.

In a recent interview, Pandey, who took charge as the revenue secretary earlier this month, said the income tax department will implement faceless assessment for all scrutiny cases over the next one year as it seeks to make the process objective without any scope for bias.

Asked how the government would go about increasing the tax-to-GDP ratio, Pandey said: “There are two issues to this. One involves the policy of the government as to which are the areas which are not taxed and should be brought into the tax net. The other involves wherever some steps are required to improve compliance, there compliance should be ensured.

“So in the areas where is there of scope taxation, and where it can be done without any adverse impact, such areas will have to be identified and accordingly we will have to work on this."

In the last four years, the country's tax-to-GDP ratio has improved from 10 per cent to 11.5 per cent.

Finance Minister Arun Jaitley had earlier said that while the salaried class pays its due share of taxes, "most other sections" have to improve their tax payment record, which is keeping India "far from being a tax-compliant society".

Pandey said the number of income tax return filers has jumped 50 per cent to over 6 crore in the assessment year 2018-19 compared to the year-ago period.

He said in order to improve the tax compliance and also to facilitate the honest taxpayers, various initiatives are being planned by the Central Board of Direct Taxes.

"Our endeavour is that over a period of next one year or so, we should move towards a system where the scrutiny will happen in a faceless manner where a person can be given a questionnaire of the points which have been raised in the scrutiny and then the person can reply on the portal or through the emails to the officer who can be located anywhere in the country so that the case of scrutiny is decided in a very, very objective manner without any scope for any bias or harassment," he said.

With regard to the Goods and Services Tax (GST), Pandey said tackling evasion would be one of the priority areas as it not only affects the revenue of  the government, but also makes those businesses which are honestly paying tax less competitive.

"Our effort is to bring in systems so that the tendency to evade is brought down so that those who are paying taxes honestly are not put at disadvantage.

"What we are trying to ensure is a large number of taxpayers who are paying taxes honestly, they are not to be disturbed. And those who are defaulting in payment or filing returns, or not filing correct returns, and not paying due taxes should be brought within the tax fold," he said.

Over 1.16 crore businesses are registered under GST, which was rolled out on July 1, 2017, after subsuming 17 local taxes, including excise duty, service tax and VAT.

Stating that only a "fraction of a percent" of registered taxpayers would be asked for clarification in case of mismatch in returns, Pandey said in cases where clarification is not sufficient, further action would be taken.

"Whole purpose is no honest taxpayer should be disturbed and at the same time we have to discourage people who evade taxes so that government revenue is not impacted and competitiveness of honest businesses also does not suffer," he said.

The monthly GST revenues have averaged Rs 97,100 crore in the April-November period of the current fiscal, up from Rs 89,100 crore in the pervious financial year.

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