Expedite IT refunds through online passbook mechanism: Ficci
June, 13th 2014
Industry body Ficci has asked Finance Minister Arun Jaitley to expedite IT refunds by making the process taxpayer-friendly through issuance of an online passbook linked with the permanent account number (PAN) in which refunds are credited as dues for each financial year.
The passbook could also be used by the tax payer for payment of advance tax for the subsequent year, it said.
"Such a passbook would lend credit worthiness to the taxpayer and banks will also willingly lend, if the tax payer wishes to borrow to meet his or her tax liabilities," Ficci Chairman of National Committee on Transport Infrastructure K K Kapila said in a letter to Finance Minister Arun Jaitley.
Refund of income tax is a part of the working capital for any business entity, particularly consultants, whose main assets are in the nature of recoverables from clients, Ficci said.
"Linking the issue of refund to the finalisation of scrutiny assessments leads to avoidable and prolonged delays which adversely affect the working capital funding of the Assessee, particularly, the consultants. This has an adverse effect on the business since banks do not freely sanction working capital advance to the Consultants," Kapila said.
"It is, therefore, requested to delink the issue of refund from finalisation of the assessment. In case of any demand resulting as a consequence of scrutiny assessment, the Department has all the means at its disposal to recover the dues," he added.
The industry chamber requested the government to provide relief to the consulting engineering companies at par with other agencies of government for infrastructure projects.
"Government funded infrastructure projects are impeded by discrimination against the consulting engineering companies by levy of service tax. This critical issue originated with the introduction of Point of Taxation Rules 2011 & subsequent amendment in Finance Act 2012," Kapila said.
The consulting engineering companies provide services relating to survey, investigation, design, detailed project report & also supervision for implementation of such infrastructure projects. Besides, Ficci urged the government to charge service tax to infrastructure consultants via the Tax Deducted at Source (TDS) mode.
"This would mean that when a client makes payment to the consultants for their services, he simultaneously deposits the service tax amount with the tax authorities against the service tax account of the consultants". "This mechanism would solve the entire problem and the government will be able to collect its revenue faster, than it does at present and ensure full compliance," Kapila said.