Thursday, June 30 2005 15:50 Hrs (IST) - World Time -

New Delhi: Stressing that lowering of tax rates should provide no reason for tax evasion, Government today (Jun 30, 2005) said about 130 help centres will operate from tomorrow (July 1, 2005) to assist small assessees pay taxes.

Around 80 such centres would start functioning tomorrow for direct taxes, while 50 would come up for indirect taxes, Finance Minister P Chidambaram said while inaugurating the launch of the centres.

After this, large taxpayer units would be set up in Delhi, Kolkata, Mumbai, Chennai and Bangalore to provide single window service to these assessees, he said.

The two initiatives are part of the Finance Minister's budget proposals.

Elaborating various initiatives that his ministry has taken, Chidambaram said," On income tax front, we have lowered tax rates in 1997 and changed slabs in the last budget. Now, there is no reason for taxpayers to evade tax."

There can be no argument for avoiding income tax when exemption of Rs 1 lakh is given with savings provision of an equal amount and a threshold limit of 10 per cent, he said.

On indirect taxes also, rates were reduced, while other initiatives are underway to facilitate taxpayers file returns.

An online mechanism will be introduced in two months' time for 5,500 big assesses, which contribute 80 per cent of excise duties, Chidambaram said.

There is already a mechanism for customs duty payers to clear their bills and pay taxes online, he added.

Pointing out that taxpayers may be avoiding tax out of fear, defiance and complete faith in their "immunity" to law, Chidambaram said the help centres would send a message that the State wants to collect taxes but would do so in a humane manner.

Chidambaram said he has given clear instructions to officials to move away from search and seizure methods to information and intelligence network to expand tax base.

"The idea (of setting up help centres) is to make collection and payment of taxes a friendly exercise," he added.

While the State has to collect taxes in order to provide governance, many a taxpayer take the services of middlemen to pay taxes, Chidambaram said, hoping that the tax centres would help them do so on their own.

He said the tax centres would not be set up in non-official premises so that taxpayers are not intimidated.

Calling the centres a public-private partnership, the Finance Minister said they would be set up in premises provided by trade associations and other bodies.

While these bodies would provide infrastructure for the desks, the income tax and customs and excise departments would send their officials to man them.

A massive media campaign would be launched to make public aware of these centres, Chidambaram said, while admitting that initially there may be some hiccups in the operation of these centres.

"I will personally visit some of the centres to see their functioning. And we will also get feedback from the public about their operations," he added.