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Dear NAMO Sir, Reforms Have To Start With Tax Laws. We Will Help You

NAMO_Tax2

The author, an eminent senior advocate, is a long-time crusader for reforms in the field of taxation. He believes that the change in regime is an opportune time to address the evils plaguing the tax administration. He has addressed an open letter to the Hon’ble Prime Minister in which he has systematically set out all the core issues that require to be addressed. He has also prepared a detailed discussion paper which sets out the solution to several issues. He urges all stake-holders to vigorously support the process of reforms and to make their voice heard

Shri. Narendra Modi, Hon’ble Prime Minister of India,

We, the All India Federation of Tax Practitioners an Apex Body of tax practitioners of India, heartily congratulate you on being elected as the Prime Minister of India. Indeed it was a great revolution through democratic process.


Our Federation was established on 11-11-1976 by the blessings of former Chief Justice of India, Hon’ble Mr. Justice J. C. Shah and distinguished Jurist Late Shri N. A. Palkhivala. On the Federation’s roll 121 leading Tax Associations from 16 States and 2 Union Territories are enrolled as association members. Most of the leading Senior Advocates and Chartered Accountants, who are practicing in Direct and Indirect Taxes in different parts of our country, are members of our Association. We have around 5700 individual members who are practicing in Direct and Indirect Taxes. One of the objects of the Federation is to make representations to Central / State Government and other concerned authorities on Direct and Indirect Taxes, in the mutual interest of both. Sir, just to recall a memorable event, we are pleased to state that when we made an representation to the then Hon’ble Prime Minster of India, Shri Atal Bihari Vajpayee to release a Commemorative Postal Stamp to pay our tribute in memory of Shri Nani Palkhivala, Hon’ble Vajpayeeji accepted our request and came down to Mumbai on 16-01-2004 and was pleased to release Commemorative Postal Stamp on Shri Nani Palkhivala.

Click here to download the detailed discussion paper on reforms to be carried out

Sir, we are confident that under your dynamic and visionary leadership, our country will achieve even greater heights in all fields and get global recognition. As stakeholders in nation building, tax professionals have a great role to play and are confident that the new government would be more open to objective suggestions from them to make our existing tax laws better and tax administration service oriented. We thus hope that through participatory and consultative approach which the new government seeks to adopt, tax professionals would get more opportunities for direct dialogue on issues concerning them and the nation as a whole.

As a first step in the above direction, we would like to present to the new government, in a nutshell, the following points on its agenda for immediate consideration:

1. Supreme Court Benches in four Zones or e-bench of Supreme Court can be an effective alternative for having four regional benches of Apex Court. e-Bench of Apex Court will help render speedy justice to the litigants thereby saving huge cost incurred on travelling back and forth to New Delhi;

2. Mobile Courts;

3. Mechanism for effective consultation before legislation is introduced;

4. Increase in superannuation age of High Court judges from 62 to 65 years;

5. Allocation of a separate fund for modernization of judiciary in the Finance Bill;

6. Mechanism to be put in place in respective Ministries to discuss and take action on suggestions made by the Apex Court, High Courts and other Judicial authorities;

7. Tax litigation in India – Vision and road map towards speedy justice -Measures to reduce tax litigation;

8. Income-tax Appellate Tribunal which is considered as Mother Tribunal of all other Tribunal deserves better support from the Government;

9. Transparency in appointment of members of Settlement Commission and appointment of professionals as Members of Settlement Commission;

10. Authority for Advance Rulings may be brought under the Ministry of Law and Justice – More benches may be constituted and scope of applications be broadened – Members of ITAT may be appointed as members of Authority for Advance Rulings;

11. National Tax Tribunal Act, 2004, which is under challenge before the Apex Court may be withdrawn.

12. Important conceptual issues under Direct tax law-Direct taxes code may not achieve the desired results , hence the proposal may be dropped

Sir, our suggestions above are in the interest of the Nation. Hence, the same may be considered by the Ministry concerned and put up before you for final decision. We, therefore, earnestly plead that opportunity be given to us, to provide to the Government on a continuous basis, suggestions after getting feedback from our members who too are eager to participate and exchange their views.

With great respect and best wishes,

Yours truly,

Jai hind

ksa_sign
Dr. K. Shivaram

Editor-in-Chief, AIFTP Journal

Reproduced with permission from the AIFTP Journal, June 2014

12 comments on “Dear NAMO Sir, Reforms Have To Start With Tax Laws. We Will Help You
  1. Dilip Shah says:

    As commission agent now comes under purview of service tax in case of receipt of foreign remittance from overseas supplier (principal), who will actually pay service tax ?

    1. Our foreign supplier of goods is refusing to pay such service tax since they are located outside India and Indian laws are not applicable to them.

    2. Accordingly since I cannot recover service tax from service receiver located outside India, how I can collect and deposit same with tax authorities ?

    3. Since I am service provider, the service provider is not binded by law to pay service tax. His job is merely to charge, collect and deposit service tax with tax authorities.

    Thank you.

  2. Bharathi says:

    Dear sir

    In respect of direct taxes -amendment is required in respect of the following Sections of the Act to avoid maximum litigation –

    14A, 24, 36(1)(vii), (viia), (viii), 37, 40(a)(ia), exemptions for long term capital gains -in respect of shares, housing property, deduction u/s 80C for individuals, scrapping of international & domestic transfer pricing sections, exemptions for Banks/NBFcs in respect of TDS under u/s 197, credit for TDS, simplified rules for refunds

  3. R S Nambi says:

    Why not we create a paperless office in the Department as it will improve efficiency and reduce corruption. Moreover with the updating of records of tax payers the grievances of adjustment of old refunds which are phantoms will go away.

    Even the hearings and appeals can be managed online using internet facility so that the income tax office will look clean and will become a smart office .

    Thanks

    R S Nambi
    Consultant-World Bank

  4. vgsaiyer says:

    Sir,
    Good effort. Please consider representing common man’s difficulties like
    Food cost, residence cost and minimum social living cost.
    These costs are either nil or given at subsidized to very poor (no yardstick) by various schemes of central and state governments according to their political compulsions.
    Effective implementation is still a major hurdle in reaching these schemes to the real needy.

    But the need of the hour is to consider the fate of the lower middle and middle class citizens who are contributors of revenue to the government by various direct and indirect tax levies and wo cannot escape which are otherwise possible to the upper class citizens and to the poorest citizens.
    So the Tax Structure needs elaborate re construction by bringing the majority of the people who has more wealth concentrated with them but are escaping the tax net by various methods available to them in the present tax structure, while the middle and lower middle level income earners and burdened with the tax laws.
    This reconstruction is to be carried out with the sole aim of bringing the wealth owners to the tax net and thereby giving some relief to the middle and lower middle class which will definitely result in more contribution of revenue to the government and at the same time give the much required relief to the middle and lower middle class.
    As an expert you can recommend to the New Government which has the potential and also the inclination and intention to do good and to take the country in the Development mode.
    Regards,
    VGSAIYER

  5. Yogendra says:

    1) There should be exemption slab for service tax (end users of services) very poor person of our country is also paying service tax on consumption of electricity, small recharge of mobile, telephone usages 2) service tax should be demolished on private tuition fees 3) VAT + Service tax also be at demolished on sale of flats by builders 4) leaves of bank employees should be on their personal requirements as per personal religious festivals, there must not be common leaves for all the Govt. servants and bank employees who don’t celebrate religious/festivals 3) There must be recovery of black money gained by corrupted persons for past many years and these funds must be utilized for growth of our country 4) Education fees must be minimized, up to std. 12th there should not be any school/college

  6. PCYadav says:

    Hon’ble Dr K. Shivram ji your suggestion are remarkeble. Hat’s off to your suggestions

  7. R S Nambi says:

    Dear Dr Shivaram

    Thanks for the representation. Besides there must be certain measures for cutting down frivolous litigation, Filing appeals online , etc. The website should carry decisions not accepted by the department as well so that tax management becomes easier. Further collection of tax in cases where appeals are pending must be standardised. Further the interpretation of statute across the nation must be the same and should not vary with person.

    Further CBDT should come out with detailed guidelines in ESOP taxation in Post FBT era. The tax payers are suffering because of convenient interpretations by department officials.

    Regards

    R S Nambi
    Consultant-World Bank

  8. K B Muralidharan says:

    Minimum Alternate Tax in any form like the one in 115JB or AMT should be abolished as the difference between book tax and regular tax is reducing day by day reflecting inefficient tax administration by department

  9. jitesh sonee says:

    An informed person can only perform,conform and REFORM. A step in right direction.

  10. ajay says:

    Unfortunately, this letter was written in English… Please follow the diktat to communicate in Hindi. The Income Tax Act will soon be translated into Hindi, and law will be practiced in Hindi.

  11. Subodh says:

    sir
    one of the most important amendment needed is scraping of assumption section by Ito
    1>ALV income from housing property
    2>section 14 a
    3>pruning of section 10(38)
    stock exchange income to be taxed at appropriate rate
    study all the tax dispute with various level and come with clarification
    discourage and penalize ITO raising unnecessary demand
    make individual max rate 15% and corporate 20% do away short term long term
    rgds

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