Mumbai’s newly appointed Principal Chief Commissioner (PrCC), Income Tax, Patanjali, told ET that simplification, reduction in rates, and the rollout of the Vivad se Vishwas (direct tax dispute resolution) scheme should help boost collections.
“It will be foolhardy to say that the pandemic is not affecting but talking about the Mumbai charter, as on August 31, we are around 19% lower,” Patanjali said. “Around Rs 10 lakh crore of investment is lined up for a period of next five-years, foreign direct investments are happening and this being the commercial capital, a large part of that should come to this city. So there are green-shoots. We are hopeful and all this will take our collections higher.”
Net collections across India were 29.4 % behind until August 29, and stood at Rs 1.87 lakh crore as compared to Rs 2.65 lakh crore the previous year. The Mumbai region mopped up Rs 56,710 crore, as compared with Rs 70,368 crore the previous year.
There has been a substantial dip in the self assessment taxes by 50.3 %. Last year, as on August 29, Rs 31,660 crore was mopped up through self assessment taxes; for the corresponding period this year, it has been Rs 15,725 crore.
“The government is very sensitive and, therefore, at this point, we are not issuing any notices that are adversarial in nature. The self assessment tax has taken a dip and we can understand. FM gave clear instructions that refunds should be issued. In Covid times, this has come handy for many businesses,” he added.
As on August 29, refunds increased 2.5% to Rs 98,894 crore.
On those availing the VsV scheme, Patanjali said: “Some obvious are the penny stock brokers, search and survey cases (including those during the demonetisation exercise) where they feel it’s worth putting an end to the litigation; this includes both small and big business houses.”
Besides the private companies, some of the PSUs also want to utilize the scheme. These companies are fighting cases on technical grounds, involving different interpretations of the statute
“A few PSUs have approached. The scheme is on and is advantageous to the taxpayers and we would request tax payers to come forward and avail the same,” he added.
He described ‘faceless’ assessment exercise as a paradigm shift. “After Independence, this is the biggest reform undertaken by the government….The argument that it will increase litigation is unfounded. Even for the most complex issues, if you’re correct, no taxing authority can tax you. It is only when complex issues are involved with shades of grey then it will be a concern for that tax payer,” he said.