Introduction: The influx of notices in Income Tax and GST is causing inconvenience and dissatisfaction among taxpayers. This article examines the issues and proposes solutions for a smoother tax administration.
At present, the taxpayers of the country are not only troubled but also unhappy and feeling offended by the continuous and large number of notices related to various issues related to both GST and Income Tax taxes.
Tax assessment and scrutiny of returns in GST is already behind schedule and at present, most of the issues on which notices are coming are technical and after giving many replies, they end without any additional demand. Apart from this, in Income Tax also, at present, lakhs of notices have been issued regarding the difference between the information received by the department and the returns filed.
Read this article in Hindi: सरकार को आयकर एवं जीएसटी में जारी किये गए नोटिस की संख्या कम करनी चाहिए
Let us first talk about GST. GST was implemented as a self-driving tax system and its technical aspects were promised to be very robust and it was also said that most of the tax system would be self-assessment tax system with minimum human intervention. But if you talk to tax consultants, businessmen and tax experts working at the grassroots level, you will find that the reality is something different.
The reason why mismatch notices are coming is that GST has become a tax based on the information of a seller where the buyer does not have the right to give information about the goods he has purchased. This was not the case in the original GST plan. Even those who made the GST law had not imagined that so many notices would be issued under GST.
It is a universally accepted truth that machines do not have a brain and secondly, the taxpayer also has his own way of giving information in his return. Now the number of notices issued in this way increases very much simultaneously because the speed of machines working in this way is very fast.
Once the notice is issued, a lot of the taxpayer’s time is spent in looking at it and investigating it and what happens here is that as soon as the notice or information is received, the taxpayer starts his work and later clarification from the government in this regard is issued the tax payers have already wasted lot of energy and Time.
Same is the condition of mechanised notices in GST also. Leave aside the rest, notices worth lakhs have been issued even for updating bank accounts. All the bank accounts in the country are PAN based and GST itself is also PAN based and there are not even more than 50 big banks in the country, so instead of issuing lakhs of Individual notices, this work can be done easily by using some centralized software and getting data from banks. At present lakhs of taxpayers are doing this work individually.
One reason for a large number of notices being issued is that the system that collects and analyzes information is either flawed with lot of information or unnecessarily overactive. If the machines are reporting the same type of mistake in thousands or lakhs of taxpayers, then first they should issue notices to 1 or 2 percent cases on a trial basis and then analyse their responses and decide whether there is a need to issue lakhs of notices or not. Lakhs of notices are issued at the press of a single button with the help of software but lakhs of taxpayers have to waste their precious time and effort to respond to them.
Information technology may have been fully developed and we are world leaders in this but artificial intelligence is still in the initial stage of development and at present it needs to be used under the guidance of human mind and according to Ground reality, otherwise this problem will keep on increasing which needs to be checked for better tax compliance and collection of Tax.
Conclusion: Streamlining the notice issuance process in Income Tax and GST is crucial for enhancing taxpayer experience and compliance. The government must leverage technology judiciously and align it with ground realities to mitigate unnecessary burdens on taxpayers.
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