{"id":1249,"date":"2025-08-21T09:08:56","date_gmt":"2025-08-21T09:08:56","guid":{"rendered":"https:\/\/theleagle.in\/?p=1249"},"modified":"2025-08-23T06:00:00","modified_gmt":"2025-08-23T06:00:00","slug":"the-monsoon-of-tax-reform","status":"publish","type":"post","link":"https:\/\/theleagle.in\/?p=1249","title":{"rendered":"The Monsoon of Tax \u2018Reform\u2019\u00a0"},"content":{"rendered":"
<\/div>\n

It\u2019s raining tax \u2018reform\u2019. Income Tax Bill, 2025<\/a> (\u2018IT Bill, 2025\u2019) will soon replace the six decades old Income Tax Act, 1961. Goods and Services Tax (\u2018GST\u2019) will ostensibly be simplified by Diwali of 2025. And we will have a two-tier GST consisting of 5% and 12%, with a \u2018special\u2019 tax rate of 40% applicable to select goods and services. Income Tax Return forms are being simplified<\/a>, money limits for filing appeals<\/a> across all tax domains are being enhanced to reduce tax litigation. Cumulatively, the changes \u2013 we are informed – are part of the larger goal of ushering in \u2018Next-Generation Reforms\u2019<\/a>. There is a lot of activity, but something seems amiss.<\/p>\n\n\n\n

Substantive tax reform is amiss. <\/p>\n\n\n\n

IT Bill, 2025: Simple Language, Uncertain Policy <\/strong><\/p>\n\n\n\n

The use of simple, comprehensible, and coherent legal language is a goal worth spending thousands of hours. But such an exercise proves to be shallow and limited if the underlying policy is unclear and operating at cross purposes. Is faceless assessment scheme now the default manner of assessment<\/a> or some aspects of human interaction are to be retained permanently? Do CSR activities deserve an unqualified tax-free status? What is the appropriate manner to levy tax on trusts<\/a>? If the questions seem too narrow and pointed, what about the broader ones. Do we decisively move to the new tax regime and shed the old tax regime? Do we provide revenue targets to officers, but ensure that they don\u2019t adopt absurd positions? Can we ensure that the Revenue Department does not adopt a position that is contrary to plain language<\/a> of the statute? Do we repose faith in taxpayers and make policies from that starting point or is the default position otherwise? Should every tax treaty now be necessarily notified<\/a> or was it just a convenient argument adopted by the Income Tax Department to deny benefits to a handful of taxpayers? I can go on, but you get the gist. <\/p>\n\n\n\n

If core income tax policies are in a state of flux, the language to express that policy can only provide limited clarity. Ironically, most clarity emerges in only in provisions which endow powers<\/a> to the Income Tax Department. This includes powers of search and seizure, powers of arrest, and now that the dust has settled a bit: powers to reopen assessments. Otherwise, use of phrases such \u2018tax year\u2019 for \u2018assessment year\/previous year\u2019 or use of \u2018irrespective\u2019 instead of \u2018notwithstanding\u2019 is a choice in favor of alternate words, not necessarily clarity. The IT Bill, 2025 may be more readable compared to its predecessor. The unending provisos and explanations may have been removed, redundant provisions to some extent been deleted, and use of legalese comparatively lesser. But improved readability should not be confused with clarity.    <\/p>\n\n\n\n

GST: Multiple Tax Rates are not THE Enemy<\/strong><\/p>\n\n\n\n

Multiple tax rates in GST only take the heat because they are an obvious and low hanging target on which we like to hang all the flaws of GST. But the truth is that the Union and States cannot express their GST governance in clear and unambiguous terms. Why are purchaser\u2019s dependent on suppliers<\/a> to file their returns to claim Input Tax Credit? Why is provisional attachment of taxpayer properties so commonplace that courts must intervene repeatedly<\/a>, and caution about the draconian nature of the power of provisional attachment? What policy is guiding levy of GST on health and life insurance? Why was online gaming target of ludicrous GST claims despite the law being obviously silent on come crucial issues? Why cannot the Revenue Department not digest any loss in courts? Any major loss in courts for the Revenue Department immediately triggers an amendment<\/a> to nullify the decision. If possible, a through retrospective amendment. You want examples of these amendments? I\u2019ve enlisted some here<\/a>. <\/p>\n\n\n\n

The upward trajectory of GST collections hides the many flaws of GST governance. Instead of undertaking long, painful substantive reform, and building on the many gains of GST, we have chosen to focus on tinkering with GST rates. It is an easy sell on the political front. Come Diwali, it is easy to sell reduction of GST rates on cars and claim brownie points. But does that solve the broader issues caused by multiple tax rates in GST. The classification disputes \u2013 though source of occasional amusement<\/a> \u2013 are unlikely to see end of the day until GST magically adopts a single-rate structure. Is revenue neutral rate now completely irrelevant to determine GST tax rates? If GST Compensation Cess is phased out, will the new policy be of no more cesses on GST? Because if the Union and States are simply going to levy ad hoc cesses<\/a> on narrowed down tax slabs to compensate for revenue loss, we may as well stick with the current tax rates. And, while we at it, can someone tell me: why do gold and precious stones that they deserve a tax rate of their own?    <\/p>\n\n\n\n

Tax Administration IS Tax Policy<\/strong><\/p>\n\n\n\n

There is a credible viewpoint in tax law scholarship: tax administration IS tax policy. You can understand this pithy quote in any number of ways. First, that tax administration can elevate or bury the most prudent tax policy. Delay in processing bona fide tax refunds can defeat a well-intentioned policy of reducing tax burdens of certain taxpayers. Cancelling GST registrations for sham reasons can defeat the policy of providing registrations within three working days of filing an application of registration. The above viewpoint can also be understood to mean that tax administration is an integral part<\/a> of tax policy. Or if not integral, tax policy is certainly not distanced<\/a> from tax administration. And that any tax reform or change in tax policy that does not bring a simultaneous change in tax administration is a flawed, if not a doomed tax reform. <\/p>\n\n\n\n

We cannot expect a rewrite of a law or a change in the tax rates to simply reduce unnecessary litigation, improve compliance, or otherwise improve tax governance. We need accompanying changes in attitudes of tax officers which in turn may require a broader systemic change in the administration of our Revenue Departments. Forsaking pedantic interpretation of law, aspiring for tax coherence, letting go of smaller tax demands in the short run for long term gains of simplicity and coherence can be some of the changes. But, as I write and advocate for these changes, I\u2019m already convinced that they will take a long time to be realized. If at all.   <\/p>\n\n\n\n

Conclusion \u2013 Buzzwords Abound  <\/strong><\/p>\n\n\n\n

The landscape of tax law and policy is increasingly being populated by buzzwords of no consequence. \u2018One Nation, One Tax\u2019 was a slogan that hid the reality that some indirect taxes<\/a> will survive the implementation of GST. Now the \u2018Diwali gift\u2019 of GST tax rates restructuring is being thrown around as if sane tax policy is a largesse of the state and not a basic expectation of taxpayers. Income tax law has a \u2018new look\u2019 while it retains its old soul. And, while one cannot grouse political priorities because buzzwords sell, it is vital to understand the substance or the lack of it that hides behinds these quasi-marketing slogans. India\u2019s tax landscape needs reform \u2013 deep, wide, and substantive. Anything else is activity, not meaningful change.    <\/p>\n","protected":false},"excerpt":{"rendered":"

It\u2019s raining tax \u2018reform\u2019. Income Tax Bill, 2025 (\u2018IT Bill, 2025\u2019) will soon replace the six decades old Income Tax Act, 1961. Goods and Services Tax (\u2018GST\u2019) will ostensibly be simplified by Diwali of 2025. And we will have a two-tier GST consisting of 5% and 12%, with a \u2018special\u2019 tax rate of 40% applicable to select … Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_themeisle_gutenberg_block_has_review":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[137],"tags":[12,25,188,94],"class_list":["post-1249","post","type-post","status-publish","format-standard","hentry","category-there-are-two-certainties-in-life-taxes-and-complaints-about-taxes","tag-gst","tag-it-act-1961","tag-it-bill-2025","tag-ravpratapsingh"],"yoast_head":"\nThe Monsoon of Tax \u2018Reform\u2019\u00a0 - TheLeagle | Eco Law Forum<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/theleagle.in\/?p=1249\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The Monsoon of Tax \u2018Reform\u2019\u00a0 - TheLeagle | Eco Law Forum\" \/>\n<meta property=\"og:description\" content=\"It\u2019s raining tax \u2018reform\u2019. Income Tax Bill, 2025 (\u2018IT Bill, 2025\u2019) will soon replace the six decades old Income Tax Act, 1961. Goods and Services Tax (\u2018GST\u2019) will ostensibly be simplified by Diwali of 2025. And we will have a two-tier GST consisting of 5% and 12%, with a \u2018special\u2019 tax rate of 40% applicable to select ... Read more\" \/>\n<meta property=\"og:url\" content=\"https:\/\/theleagle.in\/?p=1249\" \/>\n<meta property=\"og:site_name\" content=\"TheLeagle | Eco Law Forum\" \/>\n<meta property=\"article:published_time\" content=\"2025-08-21T09:08:56+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2025-08-23T06:00:00+00:00\" \/>\n<meta name=\"author\" content=\"Rav Singh\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Rav Singh\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"6 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/theleagle.in\/?p=1249\",\"url\":\"https:\/\/theleagle.in\/?p=1249\",\"name\":\"The Monsoon of Tax \u2018Reform\u2019\u00a0 - TheLeagle | Eco Law Forum\",\"isPartOf\":{\"@id\":\"https:\/\/theleagle.in\/#website\"},\"datePublished\":\"2025-08-21T09:08:56+00:00\",\"dateModified\":\"2025-08-23T06:00:00+00:00\",\"author\":{\"@id\":\"https:\/\/theleagle.in\/#\/schema\/person\/3cf683f6a55fd613e1bc28173c8e0917\"},\"breadcrumb\":{\"@id\":\"https:\/\/theleagle.in\/?p=1249#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/theleagle.in\/?p=1249\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/theleagle.in\/?p=1249#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/theleagle.in\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"The Monsoon of Tax \u2018Reform\u2019\u00a0\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/theleagle.in\/#website\",\"url\":\"https:\/\/theleagle.in\/\",\"name\":\"TheLeagle | Eco Law Forum\",\"description\":\"Analyse. Discuss. Learn.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/theleagle.in\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/theleagle.in\/#\/schema\/person\/3cf683f6a55fd613e1bc28173c8e0917\",\"name\":\"Rav Singh\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/theleagle.in\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/88a0d335c97cf709c9618d1d1c19ff328612a3144c986c21e6756b1e84bc15e5?s=96&d=mm&r=g\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/88a0d335c97cf709c9618d1d1c19ff328612a3144c986c21e6756b1e84bc15e5?s=96&d=mm&r=g\",\"caption\":\"Rav Singh\"},\"sameAs\":[\"https:\/\/www.ravsingh.in\/\"],\"url\":\"https:\/\/theleagle.in\/?author=2\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"The Monsoon of Tax \u2018Reform\u2019\u00a0 - TheLeagle | Eco Law Forum","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/theleagle.in\/?p=1249","og_locale":"en_US","og_type":"article","og_title":"The Monsoon of Tax \u2018Reform\u2019\u00a0 - TheLeagle | Eco Law Forum","og_description":"It\u2019s raining tax \u2018reform\u2019. Income Tax Bill, 2025 (\u2018IT Bill, 2025\u2019) will soon replace the six decades old Income Tax Act, 1961. Goods and Services Tax (\u2018GST\u2019) will ostensibly be simplified by Diwali of 2025. And we will have a two-tier GST consisting of 5% and 12%, with a \u2018special\u2019 tax rate of 40% applicable to select ... Read more","og_url":"https:\/\/theleagle.in\/?p=1249","og_site_name":"TheLeagle | Eco Law Forum","article_published_time":"2025-08-21T09:08:56+00:00","article_modified_time":"2025-08-23T06:00:00+00:00","author":"Rav Singh","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Rav Singh","Est. reading time":"6 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/theleagle.in\/?p=1249","url":"https:\/\/theleagle.in\/?p=1249","name":"The Monsoon of Tax \u2018Reform\u2019\u00a0 - TheLeagle | Eco Law Forum","isPartOf":{"@id":"https:\/\/theleagle.in\/#website"},"datePublished":"2025-08-21T09:08:56+00:00","dateModified":"2025-08-23T06:00:00+00:00","author":{"@id":"https:\/\/theleagle.in\/#\/schema\/person\/3cf683f6a55fd613e1bc28173c8e0917"},"breadcrumb":{"@id":"https:\/\/theleagle.in\/?p=1249#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/theleagle.in\/?p=1249"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/theleagle.in\/?p=1249#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/theleagle.in\/"},{"@type":"ListItem","position":2,"name":"The Monsoon of Tax \u2018Reform\u2019\u00a0"}]},{"@type":"WebSite","@id":"https:\/\/theleagle.in\/#website","url":"https:\/\/theleagle.in\/","name":"TheLeagle | Eco Law Forum","description":"Analyse. Discuss. Learn.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/theleagle.in\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/theleagle.in\/#\/schema\/person\/3cf683f6a55fd613e1bc28173c8e0917","name":"Rav Singh","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/theleagle.in\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/88a0d335c97cf709c9618d1d1c19ff328612a3144c986c21e6756b1e84bc15e5?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/88a0d335c97cf709c9618d1d1c19ff328612a3144c986c21e6756b1e84bc15e5?s=96&d=mm&r=g","caption":"Rav Singh"},"sameAs":["https:\/\/www.ravsingh.in\/"],"url":"https:\/\/theleagle.in\/?author=2"}]}},"_links":{"self":[{"href":"https:\/\/theleagle.in\/index.php?rest_route=\/wp\/v2\/posts\/1249","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/theleagle.in\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/theleagle.in\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/theleagle.in\/index.php?rest_route=\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/theleagle.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1249"}],"version-history":[{"count":1,"href":"https:\/\/theleagle.in\/index.php?rest_route=\/wp\/v2\/posts\/1249\/revisions"}],"predecessor-version":[{"id":1250,"href":"https:\/\/theleagle.in\/index.php?rest_route=\/wp\/v2\/posts\/1249\/revisions\/1250"}],"wp:attachment":[{"href":"https:\/\/theleagle.in\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1249"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/theleagle.in\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1249"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/theleagle.in\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1249"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}