The suggestion has been made by Assocham in a letter addressed to Prime Minister Narendra Modi, wherein the industry body has sought various changes in tax laws to eliminate delay in income tax refunds and removal of surcharge and education cess for the benefit of taxpayers.
"We are sure that a tax-payer friendly regime will help in making your programme of Make in India successful and also increasing the GDP which in turn will increase the tax revenue," Assocham Secretary General D S Rawat said. Assocham said that tax laws should be made simpler as it will help the taxpayer to compute the tax liability and compliance with tax laws much easier.
Suggesting scrutiny assessment through e-hearings, the industry chamber said that the "requirement of being physically present before the assessing officer should be insisted or called upon only when it is necessary.
"The tax department should use the e-technology during assessment hearings."
On undue delay in refunds, the chamber said, "This is frankly speaking unfair to the taxpayer. Administration of tax laws need to be fair to both taxpayer as well as tax administrator. The tax refunds need not be delayed and be issued expeditiously."
"Delay in income tax refunds, giving effect to appellate order leads to drain of liquidity resulting in huge borrowing costs and should be processed within reasonable time frame."
"The law does not have any provision specifying time limit for issuance of refund. In the absence of any specific time limit, refunds are seldom processed timely and always been held up," it said.
Besides, Assocham suggested that surcharge, education cess and higher education cess should be abolished", putting forth the argument that a tax payer pays taxes to meet all the requirements of the expenditure of the country.
Referring to the amendments made by the Finance Act, 2012 regarding provisions related to income deemed to accrue or arise in India under section 9 of the Income Tax Act retrospectively with effect from April 1, 1962, the industry chamber said, "There is an urgent need to revisit this retrospective amendment so as to enhance confidence in the Indian economy."
"It is suggested that the retrospective amendment made by the Finance Act, 2012 be withdrawn," it added.
Emphasising on the need for a structured consultation process with stakeholders, Assocham said, "There should be a wider Board or an Advisory Board which includes members from the trade, industry, professional bodies on the line of the Public Sector Companies Board."