Panel to look into indirect tax reforms

Indirect tax administration reforms are high on the finance ministry's agenda. The ministry has implemented a number of suggestions made by Lok Satta, a non-governmental organisation, including setting up of a committee to monitor implementation of reforms and suggest further improvements.

The three-member committee, headed by B K Gupta, director general, directorate general of inspection, Customs and Central Excise, has been mandated to take representatives from the trade and industry also on board.

Lok Satta had made several suggestions for improving the functioning of the Customs and Central Excise departments. The reforms are focused on simplification of taxation procedures, reducing arbitrariness and excessive discretion, to check corruption.

The Central Board of Excise and Customs (CBEC) is working on some other suggestions of Lok Satta, including extending the advance ruling facility to corporates.

At present, the facility is only available to joint ventures or a subsidiary of a foreign company. The board has in principle accepted this suggestion as this will provide certainty in matters of doubt, binding effect on the concerned parties, reduce litigations and WTO complaints.

Officials said several other recommendations of the NGO had already been implemented by the CBEC. For instance, internal audit teams have been advised to inform the assessee of all the objections before preparing the draft audit report. Each assessee is given the opportunity to offer clarifications with supporting papers.

Similarly, instructions have been issued to field formations that summons to an assessee should be used only as a last resort, when it is absolutely required.

The board has also decided that for visiting units other than small-scale industries, prior permission of the assistant commissioner or the deputy commissioner should be obtained.