FM makes tax dept more people-friendly

NEW DELHI: The government on Tuesday announced setting up of a National Tax Tribunal for uniform interpretation and implementation of the Income Tax Act and 50 additional benches of the Appellate Tribunal, besides steps to quicken refunds and remove the fear of tax raids.
Finance Minister Jaswant Singh also announced introduction of the institution of ombudsman for clearing tax disputes.
"I have instructed that searches should be authorised only where credible evidence of substantial tax evasion exists. Search and seizure is to be resorted to with great care and utmost caution and to be undertaken only with orders from the Director General (Investigations)," Singh told the All India Conference of Chief Commissioners and Director Generals of Income Tax and Customs and Central Excise.
He said it has been decided to introduce 50 additional benches of Income Tax Appellate Tribunal in consultation with the Law Ministry to ensure speedy disposal of cases within six months.
For making the Compounding Taxation regime milder, Singh announced reduction in compounding fees.
"These guidelines are a little restrictive and prosecutions are launched even for technical breaches," he said adding there were 27,000 cases pending on this account alone.
"I have given instructions to reduce the compounding fees and simplify procedures", the minister said.
Singh also asked the Customs and Excise Tax officials to explore a similar scheme for compounding of offences on payment of full dues and penalties not exceeding 5 per cent of full duty.
On the achievements of the tax department, Singh said a sum of Rs 12,000 crore has been refunded till 2002 and this will in turn create activity in the economy.
Singh, however, said there is a need to review the exemptions, to identify and remove those that have outlived their utility. This will have to be completed by September 2003, he added.
Regarding reforms in indirect taxes, he said a self-assessment scheme called Accelerated Clearance of Import and Export Scheme for selected items and importers, on a pilot basis, has been introduced.
This has been started at air cargo, Sahar airport, International Container Depot at Tughlaqabad and the Chennai sea port, he said.