"Here, we are not focusing on tax policy, legislation. But focus is on the rules and features and structural reforms in tax administration. That work is going on very intensively (through this Commission)," Advisor to Finance Minister, Parthasarathi Shome said here.
Shome, who is also the chairman of Tax Administration Reform Commission (TARC), was speaking after releasing a book on Service Tax authored by P Rajendra Kumar, a member of Society of Auditors which has published it.
Elaborating about the Commission, he said with the setting up of the Commission, the income tax department would be able to work out solutions for a good tax payer so that he does not get "hampered" while a poor tax payer was "targeted" and then appropriate yardstick can be used (to collect the taxes from him).
He said the Commission members comprise Ex-Chairman of two tax boards, former Chief Financial Officer from IT service provider Tata Consultancy Services and an Ex-Vice President for Taxation from the Murugappa Group.
"It is a mixture of private and public sector. The first report by the Commission is supposed to be out by end of May and then in a years' tenure it will give four quarterly reports," he said.
Hopefully there would be dynamic recommendations and once the recommendations are out, it would be discussed by the tax administration and tax payers, he said.
"Under this process, we will be going to various metros and we have already met officers in Mumbai, Chennai, Bangalore and Kolkata. We are going to have such a meeting in New Delhi. We have also invited Chambers of Commerce, chartered accountants and tax advocates. So, their inputs are also coming in," he said.
He said one of the reasons for setting up the Commission was to bring in more transparency in the tax department and in the collection of taxes as a certain amount of "distrust" emerged between the tax department and the tax payers.
"One challenge remains and has emerged in the last five years or so, is that, even FM (Finance Minister P Chidambaram) also observed that a certain amount of distrust between tax payer and tax officer has emerged," he said.
On the roll out of Goods and Services Tax, Shome said most of the technical work was completed and it was "ready" to be introduced.
"I must say that FM (Finance Minister P Chidambaram) has gone meticulously and the constitution amendment (of GST) is fully ready. Hopefully, it will be taken up very soon as all the technical work is completed", he said.
Referring to the customs duty on products like alcohol, petroleum and tobacco products, he said it is very interesting to note that the goal (of customs duty) was to reduce their consumption but on the contrary the demand was going up.
"....tobacco, alcohol are demerit goods,because you do not want people to consume them so that there will be reduction in consumption. But the interesting thing is their demand has been quite elastic.Much tax you put, the demand does not go down.Therefore, to come to the optimal tax rates on these items is also quite difficult," he said.