The Telegraph
Tuesday , June 17 , 2014
CIMA Gallary

Panel outlines tax rejig route

New Delhi, June 16 (PTI): A government committee has suggested the abolition of the post of revenue secretary, merger of the Central Board of Direct Taxes (CBDT) and the Central Board of Excise and Customs (CBEC) and broadening the use of permanent account number (PAN).

The Tax Administration Reform Commission (TARC), headed by Parthasarathi Shome, also said the retrospective amendments to tax laws should be avoided as a principle and income tax return should also include wealth tax details.

The panel, which has submitted its first report to finance minister Arun Jaitley, also pitched for a separate budget allocation to ensure time-bound tax refund and a passbook scheme for TDS (tax deduction at source).

“The post of revenue secretary should be abolished. The present functions of the department of revenue should be allocated to the two boards (CBDT and CBEC). This would empower the tax departments to carry out their assigned responsibilities efficiently,” the report said.

The tax administration, it added, needs to have greater functional and financial autonomy and independence from governmental structures, given their special needs.

It said, the revenue secretary, an IAS, was “likely to have little experience or background in tax administration at the national level and little familiarity with tax”.

The 550-page report further said the two boards must embark on “selective convergences immediately to achieve better tax governance, and, in the next five years, move towards a unified management structure with a common board for both direct and indirect taxes, called the Central Board of Direct and Indirect Taxes”.

On PAN, the report said it should be developed as a common business identification number, to be used by other government departments also such as customs, central excise, service tax, Directorate General of Foreign Trade and EPFO.

“Both central excise and service tax should be covered under a single registration as both the taxes are administered by the same department and cross-utilisation of credit is permitted between central excise and service tax under the Cenvat credit rules,” it said.

The panel added that it was also necessary to provide for deregistration, cancellation or surrender of registration numbers and PAN.