Redefine work approach, be accountable to tax payers: Nirmala Sitharaman to tax officials

Finance Minister Nirmala Sitharaman on Friday asked tax officials to redefine their approach to taxpayers and be faster, more helpful, more agile and more accountable for building a 21st century India. After inaugurating the new CGST Bhawan in Ghaziabad, the minister told officials of the indirect tax administration that a new mindset is needed and urged them not to carry the mindset of the pre-GST era or GST first generation era and instead keep their eyes on a 21st century India. Officials should look at the “acute need for us to work together so that India can be a developed country by 2047,” she said, saying a lax approach would not help the country. Sitharaman’s message reflects the government’s eagerness to make the investment climate more attractive, as a strong revival in private investment on the back of the Centre’s strong capital spending could add more momentum to economic growth as well as job creation. The government has consistently signaled to officials to ensure that tax administration must be based on trust and that the regulatory framework must be light. Sitharaman also told officials to be consistently proactive. “Redefine how you deal with the taxpayers, (you) have to be faster, more facilitative and more accountable.” This is in line with the next generation of GST reforms, which the minister said should feel different to the taxpayer. “They should feel that they are treated honorably as they are the tax payers to the nation. If there are bad sheep among tax payers, follow the protocol to catch them. But don’t view everyone with suspicion,” the minister told officials of the Central Board of Indirect Taxes and Customs (CBIC). The statement points to the idea that the tax framework should be designed to facilitate the honest majority, rather than making it complex and prescriptive to pre-empt all imaginable violations. The minister said that from November 1, a simpler GST registration scheme will grant automatic registration within three working days in two cases – applicants who the system identifies based on data analysis, and those who self-assess that their output tax liability will not exceed ₹ 2.5 lakh per month. This reform is expected to benefit 96% of new applicants, Sitharaman said. She also said that the GST Help Centers across the country should be well-staffed, accessible and well-maintained so that taxpayers would receive timely and quality assistance. On September 22, central and state governments introduced sharp GST rate cuts in a bid to provide a consumption stimulus to the economy. Citing figures from the Confederation of All India Traders (CAIT), the minister said festive retail sales this year peaked at ₹6.05 trillion, a 25% increase over last year’s Diwali sales of around ₹4.25 trillion. Of the total, about ₹ 5.40 trillion was spent on goods and ₹ 65,000 crore on services, making it the biggest Diwali venture in India’s trade history, the minister said. An official statement issued by the finance ministry said Sitharaman called for greater empathy, greater courtesy and greater integrity on the part of all tax officials. The minister also said that the ultimate goal of reforms is to make life easier for honest taxpayers, and make them feel comfortable about every change made in the existing statutory framework.