New Delhi: The government appointed panel to suggest a roadmap for fiscal consolidation has recommended a comprehensive review of the Direct Taxes Code Bill and bringing in more services in the tax net.
The Kelkar Committee also recommended amendment to the law to make quoting PAN or the UID mandatory in all electronic transactions including bank accounts, fixed deposits with banks, salary payments and immovable property transactions, irrespective of the amount or level of transaction.
Online verification of PAN could be made mandatory for high value transactions to reduce use of black money, it said.
Highlighting that non-issue of refunds is a constant source of grievance for taxpayers, the panel said “all pending refunds should be issued at the earliest. This will also improve liquidity of taxpayers and reduce their dependence on market borrowings at a relatively high interest rate”.
Besides, the Income Tax Department should create a national portal to enable taxpayers to file applications seeking rectifications and appeal effect, it said.
Referring to the Direct Taxes Code Bill introduced in Parliament, it said the proposed legislation which intends to revamp the law relating to direct taxes is likely to result in considerable unacceptable losses on a continuing basis.
“Given the low tax-GDP ratio and the existing fiscal crisis, there is absolutely no fiscal space for such large revenue loss. Therefore, the Direct Taxes Code Bill, 2010 should be comprehensively reviewed before it is enacted into law for implementation,” the Kelkar committee report said.
Standing Committee for Finance has already given its report on the Bill.
On the indirect taxes, it suggested that the negative list of services should be reviewed for “further pruning”.
“For example, there is no case for exempting non profit organizations from the Service Tax levy,” it argued.
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