And yes, Singh has also changed procedures followed by tax officials while carrying out search and seizures operations. for one, no confessions will be obtained during this process.
In his Budget address, Singh also announced the immediate abolition of existing discretion-based system for selection of returns for scrutiny. There will be a computer-generated random selection of 2 per cent of the returns annually to arrive at a list of returns for scrutiny.
During search and seizures, Singh said stocks found would not be seized and no confession would be obtained from the assessees. Books of account impounded during survey operations would not be retained beyond 10 days without the prior approval of the Chief Commissioner.
Other tax reform measures announced by Singh include outsourcing of non-core activities of Income-Tax Department, namely the allotment of Permanent Account Number and creation of a data bank of high value transactions through the tax information network.
He said improvements in tax administration would be brought about through greater application of information technology, and a discretion-free, impersonal system.
Singh also halved the number of forms presently used in furnishing of applications and returns, for the purposes of tax deduction and tax collection at source, from the present 42 to 22.
He also announced the introduction of a one-page only return form for individual tax payers, having income from salary, house property and interest, from April 1 onwards.
He also abolished the need for tax-clearance certificates by persons leaving India, or any person submitting a tender for a government contract.
Henceforth, only expatriates who come to India in connection with business, profession or employment, would have to furnish a guarantee from their employer, etc. in respect of the tax payable before they leave India. Indians going abroad will only have to give their PAN, and the period of their overseas stay to the emigration authorities, he added.
Singh said the switchover to the value added tax regime would also play a role in overhaul of the tax administration measures of the centre and states. "The coming year will be historic with the states switching over to a value added tax. The central government has been a partner with the States, in the highest tradition of cooperative federalism, in this path-breaking reform. This will also involve an amendment to the Additional Excise Duty Act," Singh said.
Singh said that the "long-overdue" constitutional amendment to integrate services into the tax net in a comprehensive manner would be enacted and implemented in 2003-04. This will give a boost to revenues, and help implement VAT, he added.
He also said the excise duties have been rationalised further and the momentum of reducing customs duty is being maintained so as to improve the competitiveness of Indian industry in international markets. The government shall continue to strive towards fiscal consolidation through expenditure reprioritisation, and revenue augmentation, he added.
Singh has also abolished the existing 'Budget day' restriction which barred corporates from removing goods from their warehouses on February 28 every year.
The finance ministry has decided to dispense with Rule 32 of the Central Excise Rules, 2002, amending the provision preventing movement of excisable goods from a factory or warehouse between the time of presentation of the Budget and midnight on the same day.