CBEC to popularise Settlement Commission for resolving tax disputes

Revenue Department directions on indirect taxes aimed at encouraging voluntary compliance and greater use of Settlement Commission

The Central Board of Excise and Customs (CBEC) has asked its officials to encourage assessees facing notices to get tax disputes expeditiously resolved through the Settlement Commission mechanism.

The directions issued by the revenue department to Chief Commissioners and Director Generals dealing with indirect taxes are aimed at encouraging voluntary compliance and greater use of the Settlement Commission.

"...It is directed that immediately after issuance of show-cause notice, a letter should invariably be written to the noticee informing him about the scheme of the settlement," it said in a circular.

The Settlement Commission scheme, it said, has not yielded desired results even after more than 15 years of operation.

"It has been noticed that even after more than 15 years of operation of the scheme, cases through Settlement Commission have not yielded the desired results and very 'minuscule' percentage of all show cause notices issued are taken up by the assessee's for settlement," CBEC said.

According to it, one of the reasons for "not many assessee's opting for the said scheme may be lack of awareness of the scheme among them".

The objective behind the setting up the Settlement Commission was to create a channel whereby tax disputes can be settled "expeditiously and in a spirit of conciliation rather than prolonging them through adversarial attitude".