Amidst all the perception that the different kinds of schemes for resolution of tax disputes run in the recent years have led to only moderate results in reducing the load of tax litigation, Ajay Bhushan Pandey, who is the finance secretary, said that the new system of faceless assessment and appeal would be striking at the root of the problem and would also be helping to bring down the disputes substantially, on Friday.
He spoke at the Indian Express Idea Exchange program and said that the revised estimates of revenue and expenditure for the ongoing financial year are realistic. He added that if the gross direct tax collections were down by 6.7% on year by January, the gap would have been much narrower by the end of the year. The slump was partly due to the liberal refunds that were around Rs 1.91 lakh crore. He also said that tax buoyancy of 1.16 that was estimated for the financial year of 2022 was neither conservative or unduly optimistic.
While the data shows that the tax disputes have been rising and the number of high-pitched assessment orders hasn’t decreased yet, the official said that ever since the launch of faceless random assessment in August in 2020, over 50,000 disputes have been settled.
The recent Budget has extended the new system to the appeals even before the income tax appellate tribunals. The amount involved in tax disputes has already been over Rs 11 lakh crore in the financial year of 2022 end, according to the official data, up 23% over the year-ago level.
Pandey also added that India’s equalization levy has been questioned by the US. It was in sync with the principles on which an OECD framework was being worked out. He said that a rollback of this kind was unlikely to happen anytime soon. Many countries have already started adding taxing digital services, according to him.