The Industry, Traders and Commerce sections are largest tax payers of the Country. Also they are the wealth creators, employment creators, Investment opportunity generators. Generally the honest tax payers always expect some favorable attitudes from the Tax authorities in the form speedy process of clarifications, education and information for understanding the tax rates, due dates, information to be provided for filing the returns, easy refunds of taxes excess paid, claims for deductions, exemptions. In this process the tax payers’ confidence is more important. Lower the tax rates, higher the compliance, lower the suspicion higher the sincerity. All direct taxes of Income tax, Wealth Tax, Dividend Distribution Tax, Minimum Alternate Tax should not be more than 20% of Income and all Indirect Taxes rates should not be more than 5% of Sale, Service Value. Hence, the tax payer expects the following steps:
- Information: Less ambiguity, free from complication, easy to understand, Information to be provided like details of Bank transactions, assets acquired, loans obtained, Capital introduced, Indirect taxes information,
- Due Dates: The due dates for payment of taxes, rates of taxes, mode of payment of taxes, filing of returns, information to be included for all direct and indirect taxes.
- Returns: More number of returns leads to less compliance, it is better if only one return is provided for all direct taxes of Income tax, Wealth tax, and other Direct taxes. One Return for all indirect taxes of Excise, Customs, Service Tax, and all other indirect taxes of Central Govt.,
- Acceptance: The Returns filed may be accepted as it is unless something difference find according to the information available with the Departments.
It is better not to suspect but to respect the tax payers’ honesty and sincerity.
The Department should not doubt unless any wrong information if available and the verification should be restricted to that particular difference only.
- Service: The tax authorities should respect the tax payer and cooperate in explaining the tax compliance, making him understanding the difference of tax liability and tax paid. Penalty should not be initiated for irregular, non intentional discrepancies.
- Tax arrears: Information about the arrears of taxes by each tax payers should be clear and to the knowledge the tax payer. The disputes has to be allowed to be settled even after assessment. Difference of opinion can be changed suo moto by the Department after the amendments, judgments, clarifications. Many of the major disputes are due to Arrears.
- Clarifications: Any clarifications, judgments should be accepted and need not be amended and need not be disputed to continue litigation.
- Refunds: The Government has to collect the RIGHT TAXES FROM RIGHT PERSONS and there is no dispute about this concept. But when there is excess tax payment and eligible refund, the said refunds has to be issued early. Many of the disputes are due to Refunds.
- Welfare: Every tax payer’s welfare has to be taken care by the Government since he has paid the tax to the Government. For this purpose, some portion the tax payment has to be treated as Deposit which can be used to look after the welfare of the tax payers as annuity after attaining the senior citizenship age of 60 years.
- Widening of tax base: It is always treated that the tax return filer is disclosing lower income than his real income. But very low steps were taken to cover the new tax payers. In this regard, the AIR (Annual Information Return) introduced by the NDA Government in 2004, Information from Indirect Taxes, Financial Institutions, Investment monitoring agencies etc.,
- Respect: It is again expected that due respect to the honest tax payer. The tax authorities also should not suspect the tax payers unless information filed is found wrong.
In this regard, we expect the Govt. should take lenient view on difference of opinions, tax planning against tax evasion, additions are liable for penalty, not to reopen the proceedings unless explanation is called for and allowed to explain the difference, compliances, tax payments made before any proceedings initiated by the Department, the communication should contain the details of difference as per the department, Notice should be the last resort followed by the proceedings and modifications.
At the end, the tax payer should feel comfortable and happy and become friend of the Department. Majority of tax payers are honest, they should not be ill treated, suspected for the some of them who are not honest. We should not forget that they are feeding the nation with their management skills, using effectively the national resources for more purposeful usage with their good efforts, risk in business, good management skills.
Kindly consider my above said personal views having experience in profession for more than 30 years, if found reasonable and help, encourage the honest tax payers.
-CA. K.HANMANDLOO, HYDERABAD
9848071149
