GS Paper 3:
Syllabus: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment.
Source: Indian Express
Context: Under the faceless tax regime, information about high-value transactions of taxpayers is received by the tax department which is then used to issue notices under section 148 of the IT Act. Recently, thousands of such notices were issued and taxpayers had to pay tax, interest and penalties.
What is the faceless assessment scheme for Income Tax?
The faceless assessment scheme was launched in 2020 with the objective of promoting an efficient and effective tax administration, minimizing physical interface, increasing accountability and introducing team-based assessments.
The scheme lays down the procedure to carry out a faceless assessment through electronic mode.
Significance:
- An important aspect of the faceless tax regime is that even the first appellate authority — the Commissioner of Income-Tax (Appeals) — is now faceless, leaving no room for corruption.
- The faceless tax assessment system has put everything online — from the filing of returns to assessment orders.
- It has even done away with the need for huge storage facilities for the records of taxpayers.
If the faceless tax regime for direct taxes has resulted in significant benefits, the main drawback of GST (indirect tax) is that it remains face-to-face. The same faceless system can be used to rationalize of GST regime and make it more efficient.
The Goods and Services Tax (GST) has come into effect in India (2017), bringing an end to the era when traders and businessmen had to pay a host of different indirect taxes — excise duty, VAT, sales tax, service tax, octroi — at the same time.
Insta links:
Prelims link:
- faceless assessment scheme
- GST compensation fund
- Direct tax
- Indirect tax
Mains link:
Q. Explain the rationale behind the Goods and Services Tax (Compensation to states) act of 2017. How has COVID-19 impacted the GST compensation fund and created new federal tensions? (CSE 2020)
