| AN
Indian Parliamentary panel has recommended immediate implementation of
delayed mega tax reforms initiative direct tax code (DTC) to improve tax
receipts collections from the corporate sector.
The panel
named Public Accounts Committee (PAC) voiced concern over the trend of
effective corporation tax rate being lower than the statutory rate due
to existence of several tax concessions.
It says: "The
Committee hope that with the proposed transition of profit-linked
deduction to investment-linked deduction, the anomaly in the tax rate to
corporate sector would be removed. The Committee, therefore, urge the
Government to implement the DTC expeditiously."
In its
report captioned ‘Tax Administration' submitted to Parliament on 29 th
August, PAC discussed at length the issue of revenue foreone or tax
expenditure due to grant of numerous benefits to both corporate and
individual tax payers.
As put by PAC, "The
Committee would therefore, like to be apprised of the areas where
revenue loss has occurred owing to huge revenue foregone during these
years. They should also like to be informed about the extent to which
these exemptions are contributing to improvement in the
savings-investment ratio as spurt to the economic growth process."
It has
advised the Finance Ministry to phase out unwarranted tax exemptions and
deductions as an interim measure pending enactment of DTC into a law.
As
regards tax litigation, PAC noted that more than 35-40% of the appeals
filed by Income Tax Department (ITD) before different judicial forum
including Supreme Court had gone against ITD.
To
improve ITD's success rate in litigation, PAC has recommended that the
Department should be “more cautious while filing their appeals, which
should not be filed in a routine manner.”
It adds: "At
the same time, the Department should engage special counsels with
proven expertise in taxation matters to represent the complex cases in
the Tribunals, High courts and the Supreme Court."
|
