Lot needs to be done by FinMin on black money: Par panel

Not satisfied with the Finance Ministry's response on the quantum of unaccounted money brought back from abroad, a Parliamentary Panel today said a lot needs to be done regarding unearthing of black money.
The Standing Committee on Finance suggested the "Ministry should give utmost priority to the implementation of Justice M B Shah's panel so that black money stashed abroad may be brought to our hand in time."
Besides, the panel headed by M Veerapa Moily also said the government should prepare a concrete road map and suitable administrative for smooth rollout of Goods and Services Tax (GST).
In order to increase revenue, it said, Finance Ministry should usher in next generation tax reforms by ideating afresh about tax policy or regime which only would lead to transformational revenue generation figures in place of current dull situation and incremental figures of revenue both in direct and indirect taxes.

"The committee also suggest that a concrete road map as well as suitable administrative measures be prepared and kept ready for smooth rollout of GST," it said.
On the issue of black money, the committee said a lot needs to be done by the ministry regarding unearthing of black money.

A total amount of Rs 4,147 crore was declared during the 90-day black money compliance window, higher than the previously announced amount of Rs 3,770 crore.
The committee are not satisfied by the incomplete response of the ministry regarding quantum of unaccounted money brought back from abroad, it said.
"Moreover, with a view to preventing and curbing generation of unaccounted money in the first place, the committee are of the view that a combination of policy, legislative and concrete enforcement measures need to be adopted and implemented on priority basis," it said.

With regard to the sudden surge in the number of cases with Rs 1 crore plus agricultural income, the Committee dissatisfaction over the adhoc manner in which the Department of Revenue has been handling such an important issue.
"Such a lapse or overlooking may lead to creation of domestic tax haven in our economy whereby unaccounted or black money may be stashed / hidden under the head / guise of agricultural income," it said.
Expressing displeasure over the fact that the government
has not prepared a roadmap to minimize the quantum of revenue foregone, the panel wanted to know whether exemptions or incentives are in coherence with the overall intention or policy of the government.

Though it accepts the fact that incentives are surely needed to motivate and propagate the economic activities yet they are of the opinion that foregoing revenue to the tune of Rs 6.11 lakh crore whereas government's gross tax collection in last fiscal is provisionally estimated at Rs 14.6 lakh crore, needs to strengthen the economic development by substantial increase in job creation and other opportunities.
"The committee, therefore, reiterate their earlier recommendation for a comprehensive roadmap for a review of revenue foregone with a case by case impact assessment study, that would facilitate in making it more effective, targeted and in coherence with the underlying policy of the Government," it said.

On the low tax GDP ratio, the panel said, it does not augur well for the tax capacity.
In light of the tax-GDP ratio for 2016-17 (BE) which is 10.85 per cent, India's overall tax to GDP ratio is quite less than that of comparable countries.
"But what is really noticeable is that tax buoyancy for the fiscal year 2014-15 is 0.6 per cent for both direct and indirect taxes. This does not augur well for the tax capacity," it said.
It basically suggests India not able to capture the growth of the economy properly for purposes of tax collection; it also reflects deficiency in the functioning of tax administration.

The committee suggest for proper and relevant mechanism by the ministry to substantially improve the score on this board by bringing the missing tax payers into the tax net and harness their tax potential.
Further, the panel would like to point out that rationality and equitability in taxation rates or structure or classification should be maintained.
For instance, it said, excise duty structure proposed on goods such as plastic materials should be kept uniform, so that tax disputes can be avoided.
On presumptive taxation, the panel said, it will surely prove to be a great revenue fetching exercise or mode as the biggest chunk of our working population lies in unorganised sector (alongwith small businesses) and non-TDS category of assessees, and are usually reluctant to come into tax net due to fear of compliance burden of maintenance of account books.