A survey carried out by the Central Board of Excise & Customs (CBEC) for garnering a feedback on impact that reforms undertaken during the last two years of Prime Minister Narendra Modi government reveals that 51% respondents acknowledged an improvement at the ground level — at the level of inspectors and above. At the same time, responses showed that 45% of the respondents saw an attitudinal change among senior functionaries – commissioner level and above.
This trend reveals the importance that service tax has acquired over the years, broadening the taxpayer base and accounting for Rs. 2, 11,456 crore which is 26% of the indirect tax revenue in FY16.
The key question of the survey was – Do you feel a perceptible change in policies of the CBEC by way of becoming liberal and friendly to the taxpayer? An overwhelming number of respondents, 72%, responded with a “yes.” The fact that a tax department had the gumption to ask such a question and the tax payer’s having actually acknowledged positively, both are a harbinger of increasing maturity of the regulatory eco-system of India, the government said in a statement on Wednesday.
The survey, which industry body FICCI outsourced to global consultancy firm KPMG, reached out to 40000-45000 potential respondents across India.
As business demographics would suggest, respondents from Maharashtra outnumbered all states, with respondents making up for 30%, Delhi followed at number two, with 11%. Sectoral responses showed that 46% respondents from service industry, 39% from manufacturing and 15% from the trading community.
CBEC said that the outcome of the survey is heartening news for India Inc, as it is the inspector raj which is considered as the most stubborn stumbling block to improving the tax environment. In wake of widespread allegations of tax terrorism, which has most often been cited as a barrier to entry of foreign investment in manufacturing, the survey sought an opinion on whether the CBEC administration was becoming less adversarial. In response to that 32% of the respondents answered in the affirmative, which is indicative of an improving trend but does show that much needs to be done.
The most outstanding achievement of the CBEC was getting the customs single window project off-the-block on April 1. Interestingly, USA had also launched its single window in the same period but had to eventually stagger dates for accommodating different government agencies and had to infact drop FDA altogether for the time being.
Meanwhile, CBEC’s team evolved a unique methodology to solve teething problems by creating a WhatsApp group for continuously receiving a feedback on operational issues faced by the trade and disseminating solutions. At the ports, customs brokers made their own WhatsApp groups to share experiences and information.
For a highly IT driven department, it was also very heartening to note that 75% of the respondents were satisfied by the IT enabled services.
As part of Ease of Doing Business initiatives, CBEC has launched Single Window Interface for Facilitating Trade (SWIFT).
100 % e-payment of duty, permission to maintain electronic records, and acceptance of digital signatures
Online registration of new service tax assessee in 2 days
Granting provisional payment of 80% of the refund amount with 5 days in respect of service exporters, subject to fulfilment of certain conditions