Government sets up tax reforms panel under Parthasarathy Shome

The government has set up a commission under the chairmanship of finance minister's advisor Parthasarathy Shome to suggest reforms in tax administration, in order to deepen and widen the tax base while enhancing compliance.

The commission will review the existing mechanism of tax administration and recommend appropriate organisational structure for tax governance with special reference to deployment of workforce commensurate with functional requirements, capacity building, vigilance administration, responsibility and accountability of human resources. Besides, it will suggest key performance indicators, systems for assessment, grading and promotion and structures to promote quality decision making at the highest policy levels.

It will review the existing business processes of tax governance, including the use of information and communication technology and recommend measures for tax governance that is best suited to Indian context.

The commission has been asked to look into the existing mechanism of dispute resolution – both domestic and international - including time and compliance cost and recommend measures to strengthen it.

It will recommend measures for capacity building for impact assessment studies on taxpayers' compliance cost of new policy and administrative measures of the tax departments.

The panel will review the existing tax administration mechanism and recommend measures for deepening and widening the tax base and taxpayer base.

It will also recommend a system to enforce better tax compliance - by size, segment and nature of taxes and taxpayers – which would also cover methods to encourage voluntary tax compliance.

At the same time, the commission will review the existing mechanism and recommend better ways of providing taxpayer services and taxpayer education. These would include grievance redressal mechanism, simplified and timely disbursal of duty drawback, export incentives, rectification procedures, tax refunds etc.

It will recommend measures for capacity building in emerging areas of customs administration relating to border control, national security, international data exchange and securing of supply chains.

Besides, the commission will review the existing mechanism and recommend measures for strengthening of database and inter-agency information sharing among tax administrators like the Central Board of Direct Taxes (CBDT), Central Board of Excise and Customs (CBEC) and agencies like the Central Economic Intelligence Bureau (CEIB), Financial Intelligence Unit (FlU), Enforcement Directorate etc.

Besides, it would review the existing mechanism and recommend appropriate means, including staff resources for forecasting, analysis and monitoring of revenue targets, besides other issue, including those that the government may specify during the tenure of the commission.

The commission has YG Parande and Sunita Kaila as full-time members and M K Zutshi, S S N Moorthy, M R Diwakar and S Mahalingam as part-time members.

As chairman of the commission, Shome will enjoy the rank of minister of state.

Damodaran panel releases draft report on India's business climate

The committee headed by former chairman of market regulator Securities and Exchange Board of India (SEBI) M Damodaran, (Damodaran Panel), set up to assess the present business climate in the country, has circulated its draft recommendations ahead of its final submission to the government.

Giving this information in written reply in the Rajya Sabha on Monday, corporate affairs minister Sachin Pilot said some of the provisions of the Companies Bill, 2013, which has already been passed by the Parliament, incorporate certain recommendations of the committee with regard to facilitating a smoother business climate in India,

The recommendations of the Damodaran panel includes, besides others:

• Faster incorporation/registration of companies through fully electronic registry (MCA);
• Allowing companies to maintain records and hold meetings through e-governance mode;
• Empowering companies to function in a manner which is 'self-regulated with
• disclosures/transparency' rather than 'government/regulatory approval based regime';
• Recognising concepts of 'one-person company' and 'small company' to allow new entrepreneurs to take advantage of corporate form of business;
• Facilitating faster mergers and acquisitions, including short form of merger and cross border mergers;
• Time-bound approvals through National Company Law Tribunal (NCLT); and
• Providing summary liquidation process for a class of companies.