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Estimated tax buoyancy for FY22 neither conservative nor unduly optimistic: Ajay Bhushan Pandey

Speaking at The Indian Express Idea Exchange programme, the finance secretary said the revised estimates of revenue and expenditure for the current fiscal were realistic.

By: ENS Economic Bureau | New Delhi |
February 13, 2021 2:31:00 am
Ajay Bhushan Pandey

Amid the perception that the various schemes for resolution of tax disputes run in recent years have yielded only moderate results in reducing the load of tax litigation, Finance Secretary Ajay Bhushan Pandey said on Friday that the new system of faceless assessment and appeal would “strike at the root of the problem” and help bring down disputes substantially.

Speaking at The Indian Express Idea Exchange programme, he said the revised estimates of revenue and expenditure for the current fiscal were realistic. If gross direct tax collections was down 6.7 per cent on-year by January, the gap would be much narrower by the end of the year, as the slump was partly due to liberal refunds of around Rs 1.91 lakh crore. He also said that tax buoyancy of 1.16 estimated for FY22 was neither conservative or unduly optimistic (buoyancy has been in the negative territory in FY20 and FY21).

While data shows the tax disputes continue to rise and the number of high-pitched assessment orders hasn’t come down, Pandey said that since the launch of faceless random assessment last August, over 50,000 disputes have been settled. In these cases, additional tax demands were ‘large’ only in around 4,000, or 8 per cent, of the cases, as against 60 per cent in the earlier system that involved personal interface and resultant element of subjectivity, he noted.

The recent Budget extended the new system to the appeals before the income tax appellate tribunals. As per official data, the amount involved in tax disputes was over Rs 11 lakh crore in FY19-end, up 23 per cent over a year-ago; the Centre’s gross tax receipts in FY19 was Rs 20.8 lakh crore.

As many as 1.25 lakh cases, a quarter of all direct disputes, have opted for Vivad se Vishwas scheme, enabling settlement of Rs 97,000 crore in tax demands, the government has recently stated.

Pandey added India’s equalisation levy or the so-called ‘Google tax’ that has been questioned by the US, was in sync with principles on which an OECD (Organisation for Economic Co-operation and Development) framework was being worked out. He indicated a rollback of this impost was unlikely anytime soon. FE

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