Taxpayer Charter okay but execution holds the key: Experts

Fulfilling a budget commitment, Prime Minister Narendra Modi on Thursday unveiled country’s first charter of taxpayers’ rights and duties that seeks to ensure trust between a taxpayer and the administration, reduce harassment, and increase the efficiency of the department.

The Income Tax department will adopt a ‘taxpayer charter’ which outlines the rights and responsibilities of both tax officers and taxpayers.

Launching the platform ‘Transparent Taxation – Honoring the Honest’, Modi said the department will start faceless appeals from September 25.

While India Inc welcomed the move, experts said implementation of faceless assessment holds the key and that the government must be careful that in the process to cut discretion, a taxpayer should not be denied an opportunity to be heard or be able to present facts that could impact the decision of the assessing officer or the appellate authorities.

Under the faceless tax assessment system, those assessing tax would not know whose tax was being computed and the ones whose tax was being assessed would not get to know which official was doing it.

According to Indruj Rai, Partner, Khaitan & Co, “The intention behind faceless appeals is certainly noble but the implementation would be the key to ensure all steps are taken to achieve the desired objective of reducing harassment. Also, the taxpayer should still have the comfort that he is being fully heard on his point and the authority is yet approachable, especially in sophisticated cases, which otherwise involve several hearings and representations to convince the authorities.”

On the Prime Minister’s appeal to every Indian to voluntarily come forward and pay their taxes, experts said Indian tax system is so complicated and intimidating that it dissuades people to voluntarily come under its net.

In India, where tax targets are always overestimated, the field officials are constantly told to achieve a certain target and that leads to coercion and intimidation of taxpayers.