Meet targets or face music: CBDT chief tells officials
March, 09th 2012
The chairman of the Central Board of Direct Taxes (CBDT) has told senior officials that their career prospects would depend on their success in meeting targets for tax collection, emphasising the government's desperation to raise revenues to plug the rising fiscal deficit, but raising fears among the wealthy of harassment. Laxman Dass, the chairman of CBDT, has told 100 top officials that tax revenue targets are 'nonnegotiable'.
The letter, dated February 7, admonishes his colleagues, officials of the rank of chief commissioners and director general, for their lack of success in bringing in money. "I have taken over as chairman at a time when revenue collections seem to be far away from the Budget target, with less then two months at hand."
Dass outlines a carrot and stick policy to get the situation back on track. "Among the parameters of performance in your area, achievement of revenue collection target will obviously be given the highest weightage while writing your APAR and (it) will also be a major factor while considering placements during AGT 2012." APAR is the annual performance appraisal report and AGT is annual general transfer.
The aggressive stance of the tax authorities has caused dismay among some experts. "India is the highest tax jurisprudence producing country in the world. Every day at least two or three international tax decisions are being taken by either the courts or the tribunals," said Daksha Baxi, executive director at Khaitan & Co, a law firm that provides legal counselling to corporates.
A chief commissioner who does not want to be identified said: "Though it is a fact that one's performance is taken into account for promotions and transfers, a letter from the chairman is unprecedented." Dass declined to comment on the letter.
Tax head of Deloitte India, Lakshmi Narayanan told ET that assigning collection targets to officers is not a practice in developed countries. He said the CBDT chairman's letter could result in "high-pitched" demands.
"Officers are now compelled to make high-pitched demand on large corporates, which cannot be sustained at the appellate level. The excess demand get refunded next fiscal. What are they trying to do? Just deferring the problem, as it gets into litigation for five to six years." Under pressure from the top, tax officials often force assesses to pay tax - even if there is a dispute over it - threatening them with the prospect of a raid or its softer version, the so-called survey, many taxpayers complain.