Page 22 - Budget_2020

Union Budget 2020
Insertion of Taxpayer’s Charter

To empower the Board and declare a Taxpayer’s Charter

1st April, 2020

Tax Charter presents a useful tool to encourage collaboration between Governments and the tax payers. It will
provide clear view on the rights of a taxpayer and the obligations of the tax department. Tax charter will lead
to greater accountability and a strong signal that the Government intends to be taxpayer-friendly. Countries
like US, UK, Australia, etc. have successfully implemented Taxpayer’s Charter to set the context of the
regulations.

Penalty for Fake Invoice
After the launch of GST, there were many instances of fraudulent invoices in order to claim bogus Input Tax
Credit (“ITC”)
 New provision to provide for penalty on a person if: -
• It is found during any proceeding, in the books of accounts maintained, there is false entry or entry
to evade tax liability
 The proposed penalty shall be equal to the amounts of false or omitted entries
 The penalty is additionally proposed for person, other than assessee, in abatement of the aforesaid
activities

AY 2020-21 and subsequent AYs

The above amendment is proposed considering the mal-practices being followed for the purpose of buying
and selling of turnover. However, care needs to be taken to ensure that these provisions are not being
coercively used to enhance collections given the subjectivity in the language of the proposed section. Further,
including all the parties involved to an exorbitant penalty makes the provision a serious deterrent to fraudsters.

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