New Delhi, July 25: Finance minister Arun Jaitley today expanded the scope of the Tax Settlement Commission to cases where proceedings have already been initiated.
He also said that in order to provide relief to tax payers filing returns late, the Central Board of Direct Taxes will be empowered to exercise discretion in applying penalties.
Jaitley made these announcements while replying to a debate on the finance bill, which was passed by the Lok Sabha today.
During his reply, Jaitley said his government aimed to bring in a low-tax regime in the years to come. “Ours is not a high-tax government,” the finance minister said. “A high-tax government cannot promote business activity, since it will make domestic products non-competitive. High taxes also drive consumers away. Consumers buy products, they don’t buy taxes.”
He pointed out that a low tax regime will make Indian goods competitive and cited China as an example in this regard.
The minister also assured the House that his government would not resort to an indiscriminate levy of taxes with retrospective effect. “We want to revive investor sentiment which had been disturbed.”
Jaitley provided some leeway in cases of late filing of returns. He said that “for the late filing of returns there is a provision which has become onerous as huge penalty (is levied) per day and there are no power of waiver itself. So some discretion is (being) given to the CBDT with regard to that penalty where cases of late filing of returns were involved. The penalty as such will remain.”
Seeking to expand the scope of the Tax Settlement Commission, Jaitley said it will take up “cases where proceedings have been initiated for reassessment and proceedings which are pending for fresh assessment in pursuance of an order of a tribunal or a commissioner for setting aside or cancelling the assessment itself”.
This is a new development which tax professionals welcomed as a move which could reduce litigation and delays.
Jaitley also said he proposed to provide for more benches of advance ruling to handle transfer pricing disputes.
The minister, however, did not give any indication on the date of the imposition of general anti-avoidance rule (GAAR).