Sunday, June 15, 2014

The Government needs to bring an atmosphere of mutual trust and faith between the tax administrators and tax payer:

  • To selectively consider retrospective withdrawal of retrospective amendments of the tax laws during last 5 years.
  • To delete the provisions of GAAR, as it may promote unnecessary harassment and corruption.
  • Tax authorities should be advised to desist from high pitched demands and unjust orders.
  • The equity, fairness, responsiveness, simplicity and transparency need to drive the tax department.
  • International transfer pricing adjustments should be based only on clear-cut evidence and not on the basis of comparisons to which assessee has no access. The approach need to be judicial and reasonable.
  • The tax department and assessee personal interface to be limited to only exceptional circumstances and all details needed in any scrutiny should be only electronically sought/ submitted.
  • Raids, Surveys and Searches to be limited to only very exceptional cases to be approved at the highest level.
  • Direct Taxes Code need to be scrapped. The govt. may consider all necessary amendments in the Income Tax Act.
  • The SEZ Unit to be exempted from MAT and Dividend Distribution Tax. Similar benefit can be considered for domestic manufacturing sector set up in backward zone, subject to employment creation.
  • The provisions attracting litigation to be made simple and assessee friendly. Multiple level appeals by the tax department, to be subjected to an independent internal judicial committee review to end continuous litigation. Decisions of tribunals and high courts to be made binding on national basis.
  • Black money eradication from the system will require lower rates of Indirect taxes and direct taxes similar to countries like Singapore.


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