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Finance Minister Arun Jaitley’s Budget for 2017-18 could see some key indirect tax changes such as a review of exemptions that may have outlived their utility, rationalisation of taxes in order to enhance the ease of doing business, and tightening tax evasion rules.
While the intended rollout of the Goods and Services Tax from April 1, 2017 is expected to be the big-ticket announcement on indirect taxes, the Central Board of Excise and Customs (CBEC) has asked its field formations to examine these and other aspects while submitting suggestions for the Budget.
“There may be cases where an exemption has been in force for a number of years and has outlived its utility or linked to end-use conditions which are difficult to administer and monitor. Such cases can be identified,” said the CBEC in a letter.
Both the CBEC as well as the Central Board of Direct Taxes seek inputs every year from field offices while formulating tax proposals for the Budget; the exercise has been advanced this year in line with the government decision to present the Budget in early February.
After a slew of proposals in Budget 2016-17, the Department has also stressed that suggestions on tax policy should also keep in mind the government’s focus on enhancing the ease of doing business so as to create an enabling environment for taxpayers leading to reduced compliance costs with minimum scope for disputes and litigation. In the letter, the CBEC said field formations can also send suggestions relating to MRP-based assessment, Cenvat credit schemes as well as abatement rates for commodities.
It has also asked field offices to identify sectors and commodities that are prone to tax evasion and suggest measures to combat it.
In the case of service tax, the Board has sought suggestions on facilitating the movement towards a GST through amendments of rules and procedures or procedural simplification.
It has also asked its field offices to provide details on any difficulties being faced in the implementation of negative list of services as well as the adverse impact on revenue collection of any judicial decision.
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