Page 55 - GSTL_27th August 2020_Vol 39_Part 4

2020 ] NEWS DESK J111
Sounding exactly like FMs Pranab Mukherjee and P. Chidambaram, he
asserted the Government would not let go of what it saw as “legitimate tax de-
mands”. India slapped tax notices on foreign institutional investors to extract
` 40,000 crore from them under the tortuous Minimum Alternate Tax (MAT)
when that action perversely overrode the benefits given to foreign entities under
the country’s bilateral tax treaties. India became a laughing stock of the world’s
business and financial community. The pre-election promise to end tax terrorism
sounded like a cruel joke. It has sot worse every year.
Draconian laws : Under Sections 132 and 132A of the I-T Act, the De-
partment can conduct a search and seizure (popularly called raid). In 2017, these
sections were amended. Now the Department can raid you if it has “reason to
believe” or “reason to suspect”. But it does not have to disclose the reason to any
authority or even the Appellate Tribunal. For this, Section 132(1) was amended
retrospectively from April 1, 1962, and Section 132(1A) from October 1, 1975! Is
this a just fair, accountable system that the charter is talking about?
Under Section 276CC, failing to file tax returns in time attracts rigorous
imprisonment for six months to seven years, plus a fine if the tax amount is more
than ` 1 lakh - even if the taxpayer pays up the tax amount due on his own,
along with the penalty. Is it a just and fair system that the charter promises to jail
a late filer, who is clearly not a tax evader? Goods and Services Tax (GST) impos-
es criminal penalties for simple mistakes to frauds. GST Commissioners can ar-
rest people without registering an FIR and businessmen do not have the option
of anticipatory bail. These and many other punitive Sections were introduced by
the Modi Government to create an “anti-corruption” image.
Ignoring cries of tax terrorism : As tax terrorism increased sharply, more
and more people started complaining. T. Mohandas Pai, Former Chief Financial
Officer of Infosys and a die-hard fan of the regime, was driven to State bitterly :
“The Government has failed to protect citizens and business from a tax system
that has run amok with a broken assessment system and a broken appeal system!
No major country has both broken. Tax officials seem to think of everybody as
evaders and themselves as vigilantes! We have filed returns in over 30 countries,
but no country treats taxpayers as badly as India does.”
M.R. Venkatesh, a Practising Chartered Accountant; said it was not tax
terrorism but tax jihadism. “Those of us who handle the Income-Tax Department
or GST or Customs or the Excise Department on a daily basis can see that the
kind of powers given to the officers today... but with no accountability. And they
have gone berserk.” What was the Government’s response? Mr. Modi told a
business paper : “It is a fact that some black sheep in the Tax Administration may
have misused their powers and harassed taxpayers, either by targeting honest
assessees or by taking excessive action for minor or procedural violations... I
have also instructed... to ensure that honest taxpayers are not harassed and those
who commit minor or procedural violations are not subjected to disproportion-
ate or excessive action.” Strange advice. We will have draconian rules, but offi-
cials are supposed to use discretion in applying them! In fact, they are not sup-
posed to use discretion and they don’t.
Stiff targets : Tax harassment cannot ever reduce because the Depart-
ment has been given stiff revenue targets year after year to feed the monster of
big Government. Former Finance Minister P. Chidambaram was notorious for
setting difficult targets and thereby unleashing tax terrorism. This Government is
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