Careful in tax chase, revenue secy tells staff

Cautioning tax officials to not kill the goose that lays the golden egg in the process of tax collection, revenue secretary Sanjay Malhotra told a gathering of officials that they need to be careful not to hurt the economy's interests in the hunt for revenue.

- Gireesh Chandra Prasad

"We are here not only for revenue (collection for the exchequer), we are here also for the country's economy," Malhotra said. "And so, if in the process of garnering some small amount of revenue, we are hurting the whole industry and the country's economy, then certainly, that is not the intent."

The revenue secretary was speaking on Wednesday at the 67th foundation day of anti-smuggling agency Directorate of Revenue Intelligence (DRI) in the capital.

The message comes in the backdrop of an explosion of tax notices, especially pertaining to GST (goods and services tax). More than 1,000 GST notices have been sent to businesses across industries such as insurance, aviation, software exporters and online gaming in the weeks to 5 August, leading to tax disputes.

That was the cut-off date for the authorities to enquire about alleged short payment of taxes and wrongful use of tax credits in 2017-18, Mint had reported earlier. The final orders on these notices are expected from GST authorities by February 2025.

Malhotra urged the officials to exercise fair judgment while evaluating cases. "We have to be very careful when we take action in the case of failures of technical nature involving issues of interpretation or classification of product or service, leading to high-pitched tax demand," Malhotra told the gathering.