Will generate PAN at back-end if not linked to Aadhaar: Revenue Secretary

We have used the facility of interchangeable use of Aadhaar and PAN for the convenience of people, said Revenue Secretary Ajay Bhushan Pandey

As the announcement by former finance minister Arun Jaitley to cut corporate tax rate to 25 per cent across the board by FY19 remains to be implemented, Revenue Secretary Ajay Bhushan Pandey says every one percentage point reduction leads to revenue loss of Rs 15,000 crore. In an interview to Dilasha Seth and Indivjal Dhasmana, he says the rate will be reduced to 25 per cent for large corporates, too, as and when exemptions are phased out and revenues rise.  Edited excerpts:

Isn’t India increasingly turning protectionist with the Budget hiking customs duty on a slew of items?

We have increased duty only on items manufactured in India. Every country has to encourage its own industry, besides exposing it to certain competition. Marginal increase in customs duty rates cannot be termed as protectionist, as the move is WTO-compliant. Our duties are much lower than the bound rate.  

Although revenue collection target has been reduced significantly, the target for personal I-T mop up shows 20 per cent growth. Is that achievable?

Yes, it is achievable. We have to make the system of personal income tax (I-T) collection more efficient. If there are instances of evasion or people not reporting their income, the system needs to be strengthened. We have not increased the personal I-T rate except for high networth individuals.

For affordable housing, we have given a concession. So we can only achieve that kind of growth by plugging evasion. The system should be made convenient so that all transactions get reported.

Don't you feel faceless scrutiny will lead to higher litigation as it will be difficult to scrutinise complex cases over electronic communication alone?

Not necessarily. There are many cases that only require a clarification to be given online and not face-to-face interaction. These are 80-90 per cent of cases, where you only need to furnish proof of transaction.

Will the retrospective amendment in the Black Money Act to bring NRIs into the ambit not lead to litigation?

Yes, the amendment will apply from the date that the Black Money Act came into being. Litigation may come up in any case, but one has to consider whether you have sound logic for coming out with measures.

The Budget has allowed the use of PAN and Aadhaar interchangeably. Is the idea to phase out PAN, in future?

We have used the facility of interchangeable use of Aadhaar and PAN for the convenience of people. However, when Aadhaar will be used in lieu of PAN to file returns, we will generate PAN at the back-end and also communicate the same to the filer.

The Budget also says PAN will become inoperative if not linked to Aadhaar. Does it mean Aadhaar overrides PAN?

If you have not linked PAN to Aadhaar even after repeated extensions, the question is whether those PAN cards are even genuine. Therefore, we will block or invalidate those unless linked to Aadhaar.

If one files returns using Aadhaar even though he has a PAN card, will the person end up with two PAN cards if another is generated at the back-end?

In cases where PAN is not linked to Aadhaar and the latter is used to file returns, then a PAN will naturally be generated. Once the old PAN comes up for linking, we have to decide which survives.

Is India becoming a highly taxed country after the super-rich cess?

Other countries have a much higher I-T ceiling rate. For instance, France’s highest individual tax rate is 66.2 per cent, while that for Canada is 54 per cent and China 45 per cent. So how is India highly taxed?

Also, Warren Buffet has said the rich should be taxed more. US Senator Elizabeth Warren started a movement to encourage the rich to give back to the country more. With the same spirit, we are nudging people who are in that capacity to contribute more towards development.

Former Finance Minister Arun Jaitley had promised an across-the-board reduction in corporate tax to 25 per cent over 4 years. What is the roadmap now for that?

The proposal was about phased reduction — that we will reduce tax and also withdraw exemptions. At the moment, very little exemptions have been withdrawn. There is a revenue implication of Rs 15,000 crore for reduction in every 1 percentage point. As our revenue improves and as and when we are able to withdraw exemptions, we will make it across the board.