An income tax lesson for the GST

GS 3 document:

Program: The Indian economy and issues relating to planning, resource mobilization, growth, development and employment.

Source: Indian Express

The context: Under the faceless tax system, information on taxpayers’ high-value transactions is received by the tax department which is then used to issue opinions under Article 148 of the IT law. Recently, thousands of such notices have been issued and taxpayers have had to pay taxes, interest and penalties.

What is the Faceless Income Tax Assessment Scheme?

The Faceless Assessment program was launched in 2020 with the aim of promoting efficient and effective tax administration, minimizing physical interface, increasing accountability and introducing team assessments.

The plan defines the procedure to be followed to carry out a faceless evaluation thanks to the electronic mode.

Importance:

  • An important aspect of the faceless tax system is that even the first appeal authority — the Income Tax Commissioner (Appeals) — is now faceless, leaving no room for corruption.
  • The faceless taxation system has put everything online — from the filing of declarations to assessment orders.
  • He has even no more need for huge storage facilities for taxpayer records.

If the faceless tax system for direct taxes has resulted in considerable benefits, the main disadvantage of the GST (indirect tax) is that it remains face to face. The same faceless system can be used to streamline the GST system and make it more efficient.

The Goods and Services Tax (GST) came into effect in India (2017), ending the days when traders and businessmen had to pay a host of different indirect taxes – excise, VAT , sales tax, service tax, grant – both.

Instagram links:

Preliminary link:

  1. faceless rating system
  2. GST Compensation Fund
  3. direct tax
  4. Indirect tax

Mains connection:

Q. Explain the rationale behind the Goods and Services Tax (State Offsetting) Act of 2017. What has been the impact of COVID-19 on the GST compensation fund and created new federal tensions? (ESC 2020)

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