Indirect tax assessments not to be reopened if turnover rises

Revenue Department on Sunday said officials will not reopen the past assessments of excise and service tax of assessees even if their turnover in the current period increases on account of digital payments in the wake of demonetisation.

In a circular to excise and service tax chief commissioners, the Central Board of Excise and Customs (CBEC) said there are “apprehensions” that an increased turnover because of use of digital modes of payment may lead to demands for the earlier period.

“It is, hereby, clarified that in indirect taxes, past assessments will not be reopened for this reason alone,” the CBEC said. Ever since the demonetisation announcement on November 8, in order to curb generation of black money the government has been taking steps to encourage people to shift towards digital mode of payment while making financial transactions.

“By adopting a digital mode of payment, no financial transaction would remain undisclosed and consequently an enhanced turnover might get reflected in the books of accounts,” the CBEC said.

In a similar circular, the policy making body of the income tax department -- the CBDT -- had last week assured assessees that taxmen will not reopen their past cases on mere spurt in turnover because of digital payments.

Meanwhile, he Income Tax Department is mulling a major educational drive to update professionals, taxpayers and representatives of trade bodies about the initiatives being taken by it with regard to online grievance redressal and e-filing of returns.

The drive is aimed at updating stakeholders who have not been able to keep pace with the changes initiated by the department in the recent past, according to a communication sent to Chief Commissioners of about four dozen I-T zones across the country.

“The workshop/seminar will aim at educating the tax payers and professionals about e-filing of returns, online filing of TDS returns and rectification application, Ayakar Seva Kendra (ASKs), resolution of nagging issues like credit of TDS, mismatch of TDS entries, filing and processing of PAN/TAN application, redressal of grievances, and e-nivaran,” said the communication. These initiatives form part of the milestone set by the revenue department which are to be achieved in 3, 7 and 15 years time frame, which included extension of outreach programme to all major cities having income tax offices.

The Central Board of Direct Taxes (CBDT) said that the field of tax payer services in the I-T department has become very important with new initiatives and emphasis of the government on e-governance.

The CBDT said it has noticed that taxpayers and professionals have not been able to keep up with the pace of change and hence wide gap has emerged between the initiatives undertaken by the department and the acceptance by the stakeholders. “Unless people are driven home with the new initiatives in the field of tax payer services and got used to working therewith, the objectives of e-governance will get defeated,” it said while highlighting the need to educate tax payers by organising workshops at each station in India.

In order to provide a fair and transparent tax administration and improved taxpayer service, the I-T department has taken several steps including that of paperless assessment, streamlining scrutiny assessment proceedings, and e-mail based scrutiny. Besides, CBDT has directed all its officers to mention e-mail address and phone numbers in all communications to facilitate electronic interface of the taxpayer with the department.