Tax Administration Reform in India Tax Administration Reform in India Spirit, Purpose and ...

185 Pages·2014·4.53 MB·English

TTTTaaaaxxxx AAAAddddmmmmiiiinnnniiiissssttttrrrraaaattttiiiioooonnnn RRRReeeeffffoooorrrrmmmm iiiinnnn IIIInnnnddddiiiiaaaa
SSSSppppiiiirrrriiiitttt,,,, PPPPuuuurrrrppppoooosssseeee aaaannnndddd EEEEmmmmppppoooowwwweeeerrrrmmmmeeeennnntttt

SSSSeeeeccccoooonnnndddd RRRReeeeppppoooorrrrtttt ooooffff tttthhhheeee
TTTTaaaaxxxx AAAAddddmmmmiiiinnnniiiissssttttrrrraaaattttiiiioooonnnn RRRReeeeffffoooorrrrmmmm CCCCoooommmmmmmmiiiissssssssiiiioooonnnn
MMMMiiiinnnniiiissssttttrrrryyyy ooooffff FFFFiiiinnnnaaaannnncccceeee,,,, GGGGoooovvvveeeerrrrnnnnmmmmeeeennnntttt ooooffff IIIInnnnddddiiiiaaaa

NNNNeeeewwww DDDDeeeellllhhhhiiii
SSSSeeeepppptttteeeemmmmbbbbeeeerrrr 2222000011114444

Table of Contents

S. No. Subject Page Nos.
1. Preface i - iii
2. Composition of the Tax Administration Reform Commission iv
3. List of Tables v
4. List of Diagrams, Graphs and Boxes vi
5. List of Annexures vii
6. Glossary viii - xiii
7. Chapter VIII – Customs capacity building 551 - 631
VIII.1 Introduction 551
VIII.2 Snap shot of customs in India 551
Emerging trends in the global economy and
VIII.3 560
the changing role of customs
VIII.4 Way forward 567
VIII.5 Summing up 626
VIII.6 Recommendations 627
8. Chapter IX – Information exchange 632 - 688
IX.1 Need for information exchange 632
IX.2 Current status 633
IX.3 Global best practices 649
IX.4 Gap 661
IX.5 Way forward 665
IX.6 Roadmap 673
IX.7 Summing up 682

IX.8 Recommendations 682
S. No. Subject Page Nos.
9. Appendices
Chapter IX 690 - 712
CIB module in the ITD system of the
IX.1 690
CBDT
IX.2 Information exchange through DTAAs 691
IX.3 Data collection mechanisms of the CBEC 693
IX.4 Mandate of the CEIB 695
IX.5 Updated mandate of the EIC 700
IX.6 Financial Intelligence Unit 702
IX.7 Methods of information exchange 704
Legal arrangements for inter-agency
IX.8 708
collaboration
10. Annexure
Annexure – I TARC meetings with its stakeholders 714
Annexure – II Composition of Focus groups 715
Annexure – III TARC meetings 716
Annexure – IV Gazette notification constituting TARC 717
Tax Administration Reform Commission

Chairman
Dr. Parthasarathi Shome Level of Minister of State

Members- full time
Y. G. Parande Ex-Member, CBEC
Sunita Kaila Ex-Member, CBDT

Members- part time
M.K. Zutshi Ex-Chairman, CBEC
S.S.N. Moorthy Ex-Chairman, CBDT
S. Mahalingam Ex-Chief Financial Officer and Executive
Director, TCS
M.R. Diwakar Ex-Vice President, Taxation, Murugappa
Group
Secretariat
Sanjay Kumar Secretary
N.K. Jain Director
Sukalyan Banerjee Under Secretary

Research Consultants
Vrinda Jaju
Prativa Shaw

Administrative Support
Tejpal Consultant (Administration)
Jagdish Assistant
Ankur Verma Steno/Assistant

iv
Tables

Table 8.1 Total tax revenue of the central government and share of customs duties
Table 8.2 Revenue foregone
Table 8.3 Outright smuggling cases detected by DRI and other customs formations
Commercial frauds and duty evasion cases detected by DRI and other
Table 8.4 customs formations
Table 8.5 Arrests, preventive detentions and prosecutions initiated by DRI
Table 8.6 Comparison of Indian customs with global trends
Table 8.7 Distribution of top importers on revenue basis
Table 9.1: Sharing of data by FIU with the tax agencies
Table 9.2: Financial outcomes of STRs
Table 9A.1: EDI partners for data or information exchange
Table 9A.2: Key outcomes of FINnet
Table 9A.3: Inter-agency information sharing in United States
Table 9A.4: Inter-agency information sharing in United Kingdom
Table 9A.5: Inter-agency information sharing in Australia
Table 9A.6: Inter-agency information sharing in Canada
Table 9A.7: Key of terms used in the above Tables and their meaning
Table 9A.8: Elements of service agreements
Table 9A.9: Scope elements service agreements
Table 9A.10: Elements for governance framework in service agreements
Table 9A.11: Elements for operations in service agreements
Table 9A.12: Performance elements in service agreements
Table 9A.13: Implementation elements in service agreements

v
Diagrams

Diagram 8.1 Evolution of role of customs
Diagram 8.2 Dynamic risk management framework
Diagram 8.3 Pre and post-modernisation customs control paradigm
Diagram 8.4 Border eco-system
Diagram 8.5 Layered approach to coastal security
Diagram 9.1 Flow of AIR and CIB information into the ITD system
Diagram 9.2: Schematic diagram of Integrated Taxpayer Data Management System
Diagram 9.3: Schematic diagram of DW & BI
Diagram 9.4: Schematic diagram of EDW of CBEC
Diagram 9.5: CEIB data or information exchange network
Diagram 9.6: Schematic diagram of Financial Intelligence Network
Diagram 9.7: Data lifecycle
Diagram 9.8: Infinity loop for data and information
Diagram 9.9: Stages for setting up integrated data warehouse
Diagram 9A.1: Flow of CIB information through ITD system
Diagram 9A.2: Framework for flow of FIU information

Graphs and Boxes
Graph 8.1 Container port traffic in India
Graph 8.2 Evolution of RTAs in the world, 1948-2013
Box 9.1: Collect/create once, use many times
Box 9.2: One data, many users
vi