Budget 2018-19: To cut graft, govt plans to take tax assessment beyond state borders

A jurisdiction-free assessment implies that a taxpayer in Delhi, for instance, could be assessed by a tax officer randomly selected by the online system of the tax department and located in any other part of the country.

Written by Aanchal Magazine , Sunny Verma | New Delhi | Updated: January 23, 2018 7:23:33 am
The CBDT had earlier last year constituted an internal working group to prepare a roadmap for the proposal of a jurisdiction-free tax assessment system and e-scrutiny of taxpayers. The CBDT had earlier last year constituted an internal working group to prepare a roadmap for the proposal of a jurisdiction-free tax assessment system and e-scrutiny of taxpayers.

EVEN AS the new GST regime undergoes fine-tuning, the government is focusing on minimising human interaction in direct tax, with faceless and jurisdiction-free assessment, and online feedback, in the upcoming Budget for 2018-19.

A jurisdiction-free assessment implies that a taxpayer in Delhi, for instance, could be assessed by a tax officer randomly selected by the online system of the tax department and located in any other part of the country. Such an assessment is aimed at minimising the scope for corruption and discretion by the tax officers and in turn, reduce the harassment for the taxpayers.

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The entire process may not be nameless but would enable a more technology driven interaction between the tax department and the taxpayer, with the assessment not being restricted to one officer, a senior tax official said.

To enable this change, the government needs to amend the Income-Tax Act to facilitate a common jurisdiction region for all taxpayers, the official said.

The tax department has already held discussions with its field officers on the shift to a jurisdiction-free assessment and the suggestions received from the field have been incorporated in the draft Finance Bill, 2018, by the Central Board of Direct Taxes (CBDT), the official said.

According to officials, functional specialisation is also expected to be a key feature of the new system, wherein a tax official will not handle all stages of assessment. The roles of tax officials are likely to be split in different functions of assessment, verification, tax demand, recovery and orders.

Also, one tax official won’t have complete power over a taxpayer of his/her jurisdiction. For example, if a taxpayer would be asked to furnish some details by one tax officer through the online portal, the answers would be looked into by another tax officer. Then, the final order would be issued by another officer, thereby, adding multiple layers of scrutiny and removing the discretionary powers of one tax official, officials said.

The income tax department is also working towards expanding its services under its online feedback facility. The income tax department, had launched a live chat service in July last year that has already clocked 8,424 users during July 10-December 31, finance ministry data showed.

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At present, the department answers taxpayers’ queries related to income tax e-filing, TDS and taxpayer services through its live chat window. The questions posed by individual taxpayers are answered by a team of experts from the tax department, as well as independent tax practitioners via a live chat window on the department’s portal.

Arun Jaitley GST Council meeting Finance Minister Arun Jaitley with state finance ministers at Vigyan Bhawan on Thursday (Express Photo/Renuka Puri)

The government is also relooking at the direct tax law and has announced constitution of a six-member task force, headed by CBDT Member (Legislation) Arbind Modi, to draft an appropriate direct tax legislation keeping in view the direct tax system prevalent in various countries, the international practices and the economic needs of the country.Read | This year, pre-poll pursestrings may not loosen

However, a uniform and compact tax law, in line with the Direct Tax Code, may take time and the government is thereby instead focusing on other rationalisation measures, officials said.

Finance Minister Arun Jaitley during the press conference at Media Center in New Delhi. (Express Photo by Renuka Puri)

Last September, Prime Minister Narendra Modi in his address to tax officers at Rajaswa Gyan Sangam, the annual tax conference of CBDT and Central Board of Excise and Customs (CBEC), had emphasised on the importance of minimal human interface in the tax administration’s dealings. He had said that a push should be given to “e-assessment” and anonymity of proceedings using technology, so that vested interests do not impede the due course of law.

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The CBDT had earlier last year constituted an internal working group to prepare a roadmap for the proposal of a jurisdiction-free tax assessment system and e-scrutiny of taxpayers. The group had then submitted its report in June that has been under active consideration of the department since then.

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