Tax code seeks to ensure compliance by keeping ambiguities at bay

In order to keep the cost of compliance low by facilitating voluntary compliance, the code has used simple language in drafting so as to convey, with clarity, the intent, scope and amplitude of the provision of law.

Each sub-section is a short sentence intended to convey only one point. All directions and mandates, to the extent possible, have been conveyed in active voice. Similarly, the provisos and explanations have been eliminated since they are incomprehensible to non-experts. The various conditions embedded in a provision have also been nested. More importantly, keeping in view the fact that a tax law is essentially a commercial law, extensive use of formulae and tables has been made.

The code has also tried to avoid ambiguity in the provisions that invariably give rise to rival interpretations, so that the tax administrator and the taxpayer are ad idem on the provisions of the law and the assessment results in a finality to the tax liability of the taxpayer. Power has also been delegated to the central government/board to avoid protracted litigation on procedural issues.

In order to accommodate the changes in the structure of a growing economy without resorting to frequent amendments, the essential and general principles have been reflected in the statute and the matters of detail are contained in the rules/schedules, wherever possible.

Simple format

To ensure that the law can be reflected in a form, the A-10 structure of the tax law has been designed so that it is capable of being logically reproduced.