CBDT asks field officials to ensure a taxpayer-friendly tax regime

The Central Board of Direct Taxes (CBDT) on Friday issued instructions to its field officers to strive for creating a non-adversarial tax regime and lay emphasis on punctuality, timeliness in appointment and avoiding unnecessary adjournments. Though less than one per cent of returns filed are selected for scrutiny, this area of work has often drawn adversarial comments.

Supervisory officers, have been directed to play a more pro-active role in monitoring and guiding assessments towards ensuring that high-pitched assessments without proper basis are not made and that lengthy questionnaires or summons without due application of mind are avoided. They have been directed to ensure inspections and reviews in accordance with guidelines issued to enable capacity building within the department and accountability of the officers.

In limited scrutiny cases, selected on the basis of AIR/CIB/26AS information, the enquiries will ordinarily be restricted to such information. Refunds are to be granted in accordance with instructions already issued, which provide for grant of credit of TDS on the basis of evidence submitted by the assessee. Instructions dealing with recovery/stay of demand and grant of installments have been reiterated to ensure that no coercive action is undertaken without disposal of applications for stay.

Senior officers have been directed to ensure that appeals are filed only on the merits thereof and not merely on the tax effect involved. Cases have separately been brought to the attention of the officers wherein tribunals / courts have commented adversely on frivolous filing of appeals. It has also been decided that in multi-CCIT charges, the decision to file a reference before the high court would be taken by two CCsIT.

All supervisory authorities have been directed to enable an effective grievance redressal system in their jurisdictions and also that the timelines prescribed under the Citizen's Charter, the CPGRAMS, etc for redressing grievances should be invariably followed.

Indirect tax regime
In the union budget 2014 the finance minister had announced certain initiatives to facilitate trade and cut trade transaction costs. Towards this, the indirect tax administration has taken certain measures to facilitate trade and industry in discharging their tax dues, and simplify procedures for ease of doing business.
Some of these initiatives include ensuring 24x7 customs clearances for specified export and import goods at 17 airports and 18 sea ports in respect of following categories of imports and exports by 31 December 2014.

  • Facilitated Bills of Entry where no examination and assessment is required;
  • Factory stuffed export containers and export consignment covered by Free Shipping Bills;
  • Export of all goods (in addition to factory stuffed export containers and export consignment covered by Free Shipping Bills). This facility was earlier introduced at Chennai, Bangalore, Mumbai and Delhi.

Budget 2014 had announced the Indian Customs Single Window Project. The this project aims at providing a common platform to trade to meet the requirements of all regulatory agencies (including animal and plant quarantine, drug controller, textile committee etc.) involved in Exim trade through message exchange. Single Window Scheme essentially is a network of cooperating facilities bound by a set of agreed interface specifications in which trade has seamless access to regulatory services delivered through electronic means. 

This scheme will reduce the cost of doing business, by integrating regulatory requirements on one common platform and reduce duplicity. Other initiatives to facilitate trade which are already in operation are Authorised Economic Operator scheme, ACP scheme, Self-Assessment in Customs, Risk Management System for assessment for Imports & Exports. All these initiatives are designed to facilitate trade enhance transparency and reduce compliance costs to taxpayers.

In order to reduce the compliance costs, it has been decided by CBEC that an assessee registered with both Central Excise and Service Tax authorities will be visited by only one team of audit officers to verify their records for compliance.

World Ranking: World Bank's biennial report titled Logistics Performance Index (LPI) compiles an inter-se ranking of 160 countries based upon a survey of international freight forwarders and companies engaged in international logistics. This publication, though not as widely quoted as the Doing Business Report, ranks India at 54. The LPI report states that compared with other countries in their comparable income groups, India is an over-performing non-high-income economy alongside Malaysia, South Africa, China, Thailand, and Vietnam. 

The Logistics Performance Ranking of countries includes customs operations, efficiency in international shipments, logistics competence, infrastructure quality etc. Another similar ranking is published by the World Economic Forum, titled Global Competitiveness Report 2014-15 in which it ranks 144 countries based upon a perception survey across 12 pillars. The overall competitiveness ranking accorded to India is 71. This report also ranks countries in terms of the burden of customs procedures.  India has been ranked at 75 out of 144 countries surveyed.

Trade representations on issues which are prone to protracted litigation are being addressed in a systematic manner and where necessary circulars and instructions are being issued to obviate the problems of the trade by reducing litigation. Where administrative intervention is considered necessary, directions are being given to the chief commissioners to address the problems of trade.

CBEC has advised field formations to promptly acknowledge and process the representations/communications received from the taxpayers and have regular interaction with the assessees to mitigate their problems & apprehensions. These measures initiated by CBEC are expected to foster a more transparent and non-adversarial tax administration.