Join Online GST Certification Course by TaxGuru & GST Professionals
In India of 21st century, we certainly need radical changes in taxation system and the mindset of people associated with it. The reforms are needed both from the government and the taxpayer side.
Being a Chartered Accountant, many people (especially people from business fraternity) usually asks me how to save tax. But I always ask them to focus on increasing their revenues and consequently their income net of taxes. If the people of our country give just half the focus on increasing their business than on saving taxes, they will ultimately do a great service to themselves as well as the nation.
In this regard, decision of the central government to waive off outstanding taxes of 21.54 lakh taxpayers who owe Rs 100 or less is a welcome step. Through this the government has reduced approximately 16% of the total pending tax cases. Seeing the cost benefit analysis, if the cost of collection is higher than the tax itself, then it is better to forego the same. This move of the government, aimed at improvising administrative efficiency and lowering cost of collection, will also ensure smooth refunds for assesses with such petty tax dues. The government through this will be able to prioritise bigger defaulters and at the same time there will be huge relief on government’s tax database. I hope that it is just a small beginning and the government will take number of such steps in the days to come.
Similarly, there are number of tax litigation matters pending at various judicial forums throughout the country. The government should take a holistic view of the same and take some major reforms-
By doing so, we would soon be able to minimise the burden of judiciary and save a large chunk of taxpayers money which goes waste in dragging unwarranted litigation.