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Since 1st March, 1999
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Hint of relief for harassed taxpayers
- National tribunal to interpret laws

New Delhi, July 15: Troubled taxpayers can now breathe a little easy.

Finance minister Jaswant Singh today paved the way for major tax reforms by announcing the formation of a national tax tribunal that will interpret tax laws uniformly across the country and said the number of tax forms would be slashed from 22 to 10.

To ensure that taxpayers have proper recourse to legal redress against high-handed tax officials, Singh said the government would set up 50 additional appellate tribunals that will ensure they get quick refunds if they are not properly assessed.

“To facilitate uniform interpretation and implementation of the Income Tax Act, a national tax tribunal along with 50 additional benches of the Income Tax Appellate Tribunal would be set up to ensure speedy disposal of cases within a period of six months,” Singh told tax officials while addressing the 19th all-India conference of chief commissioners and director generals of income tax and excise and customs.

Industry, which has once again been spooked by fear of tax raids, received some reassurances from the finance minister. “I have instructed that searches should be authorised only where credible evidence of substantial tax evasion exists,” he said. Search and seizures will be resorted to with great caution and will be undertaken only under the orders of the director general (investigations).

Singh also announced the institution of a tax ombudsman who would look into genuine complaints of taxpayers.

The income tax department has prepared a software called Sampark that enables easy preparation of returns by taxpayers for the assessment year 2003-04. The department will also introduce a Taxpayer Information Network (TIN).

Singh said a review of the tax exemptions was currently under way and would be completed by September 2003. Many of the tax waivers were scheduled to be phased out in the budget for 2003-04 but had to be deferred in the face of strong lobbying by interested groups.

The finance minister also announced a reduction in compounding fees for making the compounding taxation regime milder.

“These guidelines are a little restrictive and prosecutions are launched even for technical breaches,” Singh said adding there were 27,000 cases pending on this account alone.

He also said the net-based “online” tax-assessment system of the Central Board of Excise and Customs would be in place by December 2004.

Revenue collections

The finance minister today said revenue collections should be stepped up while dependence on market borrowings to fund spending must be reduced.

Singh today said that the country’s market borrowings will surge to Rs 150,000 crore this fiscal and there is little likelihood that the appetite for borrowings will abate in the near term.

“We will need to borrow Rs 130,000 crore in 2006-07,” Singh said. He stressed the need to reduce the dependence on market borrowings.

The country's market borrowings have been rising steadily over the years, leading to a high fiscal deficit due to near stagnant revenue receipts and runaway government spending.

He said the tax-to-GDP ratio of 9 per cent has not risen significantly over the years and urged the tax department to improve compliance to boost revenues.

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