The Finance Minister, Mr Pranab Mukherjee, has asked the Central Board of Direct Taxes (CBDT) to consider hiving off its technology-driven taxpayer services to a Special Purpose Vehicle (SPV) that could better deliver such services in the public-private-partnership (PPP) mode.

Inaugurating the 26th Annual Conference of the Chief Commissioners of Income Tax (CCIT) and the Director-General of Income Tax (DGIT) here on Wednesday, Mr Mukherjee pointed out that it may not be possible for the Tax Department to deliver the technology-driven services of the desired quality in the existing structure of tax administration.

“CBDT may come out with a new structure that leads to faster adoption of technology and innovation”, Mr Mukherjee said. Currently, the Income-Tax Department is providing a slew of technology-related services including e-filing of returns, e-payment of taxes, taxpayer-related information, tax credit information, and e-TDS. If these services are moved over to an SPV, they could be provided more effectively, official sources said. This would also help in providing certain value-added services in the coming days. The I-T Department is often constrained by government rules on expenditure. The SPV could also look at raising its own resources.

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The Finance Minister said that efforts should be made to further popularise and increase e-filing of tax returns and e-payment of taxes to reduce paperwork. He also wanted the CBDT to set up expeditiously the centralised processing centres (CPC) in Pune and Manesar.

Overseas centres

Meanwhile, on international taxation, Mr Mukherjee announced that eight more income tax overseas units (ITOU) would be set up within Indian missions in the US, the UK, the Netherlands, Japan, Cyprus, Germany, France and the UAE.

The ITOUs are being established to strengthen the fight against menace of tax evasion using cross-border transactions, he noted. As response to global challenges, the CBDT had recently set up two ITOUs within Indian missions in Singapore and Mauritius to facilitate exchange of information. On direct tax collection target for 2010-11, Mr Mukherjee asked the Department to collect little more than the budget estimate of Rs 4.3 lakh crore for the current fiscal.

Tax mop-up target

“You know my appetite is infinite and greed is more”, he quipped. At the same time, the Minister made it clear that he was not asking the CBDT to revise upwards its collections target for the current year. Last year, the Finance Minister had asked the Department to revise its collection target from Rs 3.7 lakh crore. The Revenue Secretary, Mr Sunil Mitra, said that direct tax mop-up in 2009-10 was about Rs 3.79 lakh crore. “I am told another Rs 1,000 crore is on its way. The department could have achieved the revised estimate if Mumbai and Delhi had done a bit more”, he said.

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