Page 439 - ES 2020-21_Volume-1-2 [28-01-21]

66 Economic Survey 2020-21 Volume 2

2. Taxpayer is expected to be aware of his compliance obligations under tax law and seek help
of department if needed.
3. Taxpayer is expected to keep accurate records required as per law.
4. Taxpayer is expected to know what information and submissions are made by his authorised
representative.

5. Taxpayer is expected to make submissions as per tax law in a timely manner.
6. Taxpayer is expected to pay amount due as per law in a timely manner.

Need for an independent Ombudsman – to ensure enforcement of taxpayers’ rights
In addition to explicitly recognizing the taxpayers’ rights, presence of a dedicated institution aimed
to take up issues from taxpayers’ perspective helps in developing trust of the taxpayers in the system.
This ensures that the taxpayers understand their rights and are treated fairly. Thus the next step may
be to ensure enforcement of rights.

India’s experience with Tax Ombudsman
• In India, the institution of Income Tax Om budsman was created in 2003 and Indirect Tax
Ombudsman came to existence in 2011. The ombudsman was appointed at the regional offices
by the Central Government from amongst the serving officers, to enquire into grievances/
complaints against the functioning of the tax authority.

• Since the functioning of Ombudsman was governed by the guidelines (Income Tax Ombudsman
Guidelines 2010 and Indirect Tax Ombudsman Guidelines 2011), and there was no act of law
empowering it with different functions, the institution of Ombudsman was ineffective and the
decisions only advisory in nature. The Ombudsman could settle complaints either through
agreements between the complainant and the tax department through conciliation and mediation
or by passing an award, with a token compensation for loss suffered by the complainant not
exceeding ` 5,000.
• The institutions of Ombudsman for direct and indirect taxes were, therefore, abolished in
February 2019. The present tax grievance redressal system consists of grievance cells headed
by department officials/ Aaykar Sewa Kendras (ASK), e-nivaran portal which is a separate
and dedicated window for grievance redressal in the Income Tax Business Application, and
CPGRAMS (Central Public Grievance Redress and Monitoring System).

Global experience with Independent tax Ombudsman
• The global experience suggests that countries with an independent tax Ombudsman have
performed better on the tax administration front through better trust between taxpayers and tax
authorities, and have exhibited a higher average Tax to GDP ratio and lower time taken to file
taxes (OECD 2017). Dedicated bodies like the Ombudsman in Australia, Canada, UK, Brazil,
South Africa and tax mediators in Belgium and France look into tax related complaints across
many countries. These bodies are independent of the tax administration.

• For instance US have an independent organization within the IRS called the Taxpayer Advocate
Service (TAS) to act as the guardian of taxpayers rights. It protects taxpayer rights and promotes