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Advance payment likely for I-T assessees going on appeal

Our Bureau

NEW DELHI, May 19

ASSESSEES who appeal against the orders of the Revenue Department may be made to cough up a certain percentage of the tax demand raised on them, even prior to the commencement of the proceedings.

The Finance Minister, Mr. Yashwant Sinha, said that the Government was considering an amendment in the tax laws which would make it mandatory for those going on appeal to pay a part of their duty demand as an advance payment.

A graded percentage is likely to be fixed depending on the stage of appeal, say 10 per cent at the first stage or 15 per cent at the second stage.

The move is expected to bring down the number of appeals against the Department, particularly those of a ``frivolous nature'', and help in garnering additional revenues. Senior officials said that the proposal was mooted by some of the

members of the Parliamentary Standing Committee on Finance.

Addressing the conference of chief commissioners of income-tax and director generals of income-tax today, Mr. Sinha underscored the need for speedy and quick disposal of pending tax disputes. He pointed out that tax arrears combined with the gross NPAs o f banks (of Rs. 58,000 crores) crossed a whopping Rs. 1,00,000 crores.

Of the total tax arrears of around Rs. 50,000 crores, the arrears in direct and indirect taxes are estimated at Rs. 40,000 crores and Rs. 10,000 crores respectively. Mr. Sinha admitted that the Samadhan scheme of one-time settlement of tax disputes did n ot meet with much success, since most of the assessees felt that they had a stronger case than the department.

He complimented the I-T Department for its efforts in expanding the tax base, particularly through the one by six criteria. ``We have a long road ahead considering that only two crores out of a population of 100 crores are under the tax net. The effort, over the last two years, leading to the sharp increase in the assessee base needs to be kept up'', he said.

Tax collections at the end of fiscal 1999-2000 grew by 25 per cent to cross Rs. 1,00,000 crore. Mr. Sinha expressed optimism about the tax targets for the current fiscal being met, particularly in view of the recovery staged by the manufacturing sector.

``An impression - which could be erroneous - has gained ground that we are targeting only the poor through subsidy reductions, but are letting tax evaders go scot free. This definitely needs to be corrected'', he said, directing tax authorities to clamp down on defaulters.

New I-T Act likely: Earlier, the Minister of State for Revenue, Mr. Dhananjaya Kumar, said that the Government was planning to set up an expert committee to draft a new the I-T Act to replace the existing one.

``We are of the view that the existing Act should be replaced with a new one in view of the rapid changes, particularly the developments in the IT sector'', he said, The panel may comprise of professionals, academicians and tax experts.

Senior officials held that the proposal was still at a nascent stage. They pointed out that some of the recommendations of an earlier Panel constituted to redraft the I-T Act - particularly those relating to rationalisation and simplification - have alre ady been implemented by the Revenue Department.

Mr. Kumar also said that the cadre restructuring proposal of the Central Board of Direct Taxes, which would improve the promotion avenues of officers, would be shortly forwarded to the Union Cabinet for clearance, he added.