NITI Aayog Advocates for Decriminalizing Tax Offenses for Business Confidence

The article discusses how NITI Aayog, the Indian government’s public policy think tank, is strongly pushing for the decriminalization of minor tax offenses across various tax laws, including GST and Income Tax.

Core Rationale for Decriminalization

Fostering Compliance and Fairness: The primary objective is to shift the compliance approach from punitive action (imprisonment and prosecution) to a civil and revenue-focused model (penalties and fines). NITI Aayog believes that criminalizing minor, technical, or procedural violations creates an atmosphere of fear and distrust, which hinders voluntary compliance.
Boosting Business Confidence: Decriminalization is seen as a crucial step for improving the ease of doing business in India. The threat of imprisonment for non-payment or minor infractions is viewed as detrimental to entrepreneurship and investor sentiment, particularly among small and medium enterprises (MSMEs).
Reducing Judicial Burden: By treating tax non-compliance as a civil wrong, the government can significantly reduce the immense backlog of tax-related criminal cases currently clogging the judicial system, allowing courts to focus on severe economic crimes.

Proposed Focus

The move generally focuses on reducing the severity of punishments for offenses like:

Minor delays in compliance.
Technical or inadvertent errors.
Non-payment of tax below a specified threshold, provided there is no evidence of willful intent to defraud.

Source :- CNBC TV18