The taskforce on indirect tax has said it will incorporate service tax issues before finalising its report.
The panel, headed by Vijay Kelkar, adviser to finance minister Jaswant Singh, said in its consultation paper that with value-added tax being debated by the empowered committee of state finance ministers, a consensus would be desirable.
Kelkar said the emphasis was on improving procedures based on applying information technology to devise a tax system that was on a par with the best in the world.
Justifying the need for a trust-based system, he said risk assessment should be non-discretionary.
Among the measures suggested for stability by the taskforce was to give a minimum tenure of two years to the chief of Central Board of Excise and Customs.
While financial autonomy for Central Board of Excise and Customs officials should be enhanced, it said the power of the staff of the Comptroller and Auditor-General to visit the assesses should be withdrawn.
Saying the steps were needed to develop a culture of compliance and to attract new tax-paying units, the taskforce suggested that central excise officials not don uniforms, unlike Customs officials.
Besides, it said no protective duty demands were required to be raised by the department against companies whenever there was an audit objection.
An ISO certification scheme for Customs offices should also be launched, it said.
To ensure realistic setting of revenue targets, the taskforce said interest on refunds and on delayed payment of taxes should be at par.
In addition, the eight-digit common classification of goods should be applicable for all goods by April 1, 2003.
Private banks should be allowed to handle receipts of government revenue, while there should be a qualifying examination for Customs House agents.
For boosting exports, the Kelkar panel has suggested tax relief for all types of goods in export-oriented units and special economic zones.
In addition, sales by these units to domestic areas should be reduced to 10 per cent by 2005-06.
For other exporters, all promotional schemes should be clubbed into two: value-based licensing and drawback schemes.
Kelkar said the duty-entitlement passbook scheme would be abolished but only after setting off the domestic taxes levied on exports.
An indirect tax ombudsman would be appointed in the four cities and no information should be sought from industry unless it was in a prescribed format, the panel said.
For fraud cases, it has suggested reverting to the old system of issuing notices, which would be rescinded if the assessee paid his dues within 30 days. Challans should also be allowed to be filed online, suggested the taskforce.
