


{"id":124059,"date":"2026-09-11T17:22:18","date_gmt":"2026-09-11T11:52:18","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=124059"},"modified":"2026-09-11T17:22:18","modified_gmt":"2026-09-11T11:52:18","slug":"parthasarathi-shome-committee","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/parthasarathi-shome-committee\/","title":{"rendered":"Parthasarathi Shome Committee (Tax Administration Reform Commission)"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">The <\/span><b>Tax Administration Reform Commission (TARC)<\/b><span style=\"font-weight: 400;\">, popularly known as the <\/span><b>Parthasarathi Shome Committee<\/b><span style=\"font-weight: 400;\">, was constituted by the Government of India in <\/span><b>2013<\/b><span style=\"font-weight: 400;\"> to examine the country&#8217;s tax administration system and suggest reforms. The commission focused on improving the <\/span><b>efficiency, effectiveness, transparency and taxpayer-friendliness<\/b><span style=\"font-weight: 400;\"> of tax administration while bringing it closer to global best practices.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The commission was headed by <\/span><b>Dr. Parthasarathi Shome<\/b><span style=\"font-weight: 400;\"> and functioned as an advisory body. It examined issues related to tax policy, taxpayer services, human resource management, technology, dispute resolution, tax governance and compliance management.\u00a0<\/span><\/p>\n<h2><b>What is the Tax Administration Reform Commission?<\/b><\/h2>\n<p><b>Tax Administration Reform Commission (TARC)<\/b><span style=\"font-weight: 400;\"> was established through a Government of India notification in <\/span><b>August 2013<\/b><span style=\"font-weight: 400;\">. Its formation had been announced by the then <strong><a href=\"https:\/\/vajiramandravi.com\/current-affairs\/finance-ministers-of-india\/\" target=\"_blank\">Finance Minister<\/a><\/strong> during the Budget session of Parliament.<\/span><\/p>\n<p><span style=\"font-weight: 400;\">The primary mandate of TARC was to:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Review the application of <\/span><b>tax laws and tax policies<\/b><span style=\"font-weight: 400;\"> in India.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Examine Indian tax administration in comparison with <\/span><b>global best practices<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Identify structural and administrative weaknesses.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Suggest measures to improve the <\/span><b>efficiency and effectiveness of tax administration<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Improve <\/span><b>taxpayer services and voluntary compliance<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Strengthen the use of <\/span><b>information and communication technology (ICT)<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Improve tax governance, human resource management and dispute resolution.<\/span><\/li>\n<\/ul>\n<h2><b>Parthasarathi Shome Committee Objectives<\/b><\/h2>\n<p><b>Parthasarathi Shome Committee<\/b><span style=\"font-weight: 400;\"> aimed to reform India\u2019s tax administration by making it more <\/span><b>efficient, transparent, taxpayer-friendly and aligned with global best practices<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Improve tax administration<\/b><span style=\"font-weight: 400;\"> and make it more efficient and effective.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Strengthen <\/span><b>taxpayer services<\/b><span style=\"font-weight: 400;\"> and facilitate easier tax compliance.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Reduce <\/span><b>tax disputes and litigation<\/b><span style=\"font-weight: 400;\"> through better dispute-resolution mechanisms.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Promote <\/span><b>voluntary tax compliance<\/b><span style=\"font-weight: 400;\"> and expand the tax base.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Increase the use of <\/span><b>technology and ICT<\/b><span style=\"font-weight: 400;\"> in tax administration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Strengthen <\/span><b>human resource management and professional specialisation<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Improve coordination between <\/span><b>CBDT and CBEC\/CBIC<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Promote <\/span><b>research-based tax policy formulation<\/b><span style=\"font-weight: 400;\"> and impact assessment.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Improve <\/span><b>transparency, accountability and governance<\/b><span style=\"font-weight: 400;\"> in tax administration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Strengthen systems for <\/span><b>revenue forecasting and tax collection<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>Major Observations of Parthasarathi Shome Committee<\/b><\/h2>\n<p><b>Parthasarathi Shome Committee<\/b><span style=\"font-weight: 400;\"> identified several structural, administrative and technological weaknesses in India\u2019s tax administration that affected <\/span><b>efficiency, compliance, revenue collection and taxpayer services<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Lack of coordination:<\/b><span style=\"font-weight: 400;\"> There was inadequate coordination between the <\/span><b>CBDT and CBEC<\/b><span style=\"font-weight: 400;\">, resulting in fragmented tax administration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Role of Revenue Secretary:<\/b><span style=\"font-weight: 400;\"> The committee observed concerns regarding the position of the <\/span><b>Revenue Secretary<\/b><span style=\"font-weight: 400;\"> in the tax administration structure, particularly as the post did not necessarily require specialised tax expertise.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>High tax litigation:<\/b><span style=\"font-weight: 400;\"> A large number of <\/span><b>tax disputes and pending cases<\/b><span style=\"font-weight: 400;\"> placed a significant burden on the tax system.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Low recovery of tax arrears:<\/b><span style=\"font-weight: 400;\"> The committee noted the <\/span><b>poor recovery rate of outstanding tax arrears<\/b><span style=\"font-weight: 400;\">, indicating weaknesses in tax collection and enforcement.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Seniority-based appointments:<\/b><span style=\"font-weight: 400;\"> Appointments to senior positions in tax administration were largely influenced by <\/span><b>seniority rather than specialised knowledge and expertise<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Revenue target pressure:<\/b><span style=\"font-weight: 400;\"> Tax officials faced pressure to meet <\/span><b>externally imposed revenue targets<\/b><span style=\"font-weight: 400;\">, which could affect the quality of tax administration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Underutilisation of technology:<\/b><span style=\"font-weight: 400;\"> The potential of <\/span><b><a href=\"https:\/\/vajiramandravi.com\/upsc-exam\/information-and-communication-technology-ict\/\" target=\"_blank\">Information and Communication Technology<\/a> (ICT)<\/b><span style=\"font-weight: 400;\"> was not being fully utilised for improving tax administration and taxpayer services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Weak research capacity:<\/b><span style=\"font-weight: 400;\"> There was inadequate <\/span><b>research-based analysis and impact assessment<\/b><span style=\"font-weight: 400;\"> to support tax policy formulation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Vigilance concerns:<\/b><span style=\"font-weight: 400;\"> The committee highlighted the issue of <\/span><b>anonymous vigilance complaints<\/b><span style=\"font-weight: 400;\"> against tax officials and the need for a more effective mechanism to handle such complaints.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Need for taxpayer-centric administration:<\/b><span style=\"font-weight: 400;\"> The existing system required greater focus on <\/span><b>taxpayer services, voluntary compliance, transparency and ease of compliance<\/b><span style=\"font-weight: 400;\">.<\/span><\/li>\n<\/ul>\n<h2><b>Parthasarathi Shome Committee Major Recommendations<\/b><\/h2>\n<p><b>Parthasarathi Shome Committee<\/b><span style=\"font-weight: 400;\"> proposed wide-ranging reforms to make tax administration more <\/span><b>efficient, transparent, technology-driven and taxpayer-centric<\/b><span style=\"font-weight: 400;\">.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Taxpayer services:<\/b><span style=\"font-weight: 400;\"> Create a separate <\/span><b>taxpayer services vertical<\/b><span style=\"font-weight: 400;\"> under CBDT and CBIC and allocate at least <\/span><b>10% of the tax administration budget<\/b><span style=\"font-weight: 400;\"> to taxpayer services.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Pre-filled returns:<\/b><span style=\"font-weight: 400;\"> Provide <\/span><b>pre-filled tax returns<\/b><span style=\"font-weight: 400;\"> to simplify tax compliance and reduce errors.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Human resource specialisation:<\/b><span style=\"font-weight: 400;\"> Promote <\/span><b>specialisation among IRS officers<\/b><span style=\"font-weight: 400;\"> and allow lateral entry of experts into tax administration.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tax administration structure:<\/b><span style=\"font-weight: 400;\"> Recommend <\/span><b>abolishing the post of Revenue Secretary<\/b><span style=\"font-weight: 400;\"> and assigning relevant functions to the tax boards.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Tax Council:<\/b><span style=\"font-weight: 400;\"> Establish a <\/span><b>Tax Council<\/b><span style=\"font-weight: 400;\"> for making recommendations on tax policy.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Governing Council:<\/b><span style=\"font-weight: 400;\"> Create a <\/span><b>Governing Council<\/b><span style=\"font-weight: 400;\"> to oversee the functioning of the tax boards.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Integration of tax boards:<\/b><span style=\"font-weight: 400;\"> Recommend greater integration, including <\/span><b>complete integration of CBDT and CBEC<\/b><span style=\"font-weight: 400;\">, to improve coordination.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Dispute resolution:<\/b><span style=\"font-weight: 400;\"> Establish dedicated <\/span><b>dispute-resolution mechanisms<\/b><span style=\"font-weight: 400;\"> and introduce <\/span><b>pre-dispute consultation<\/b><span style=\"font-weight: 400;\"> before issuing tax demand notices.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Retrospective taxation:<\/b><span style=\"font-weight: 400;\"> Avoid <\/span><b>retrospective amendments to tax laws<\/b><span style=\"font-weight: 400;\"> to provide greater certainty to taxpayers.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>PAN as CBIN:<\/b><span style=\"font-weight: 400;\"> Develop <\/span><b>PAN into a Common Business Identification Number (CBIN)<\/b><span style=\"font-weight: 400;\"> for wider use across government departments.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>GAAR:<\/b><span style=\"font-weight: 400;\"> Recommend a <\/span><b>three-year deferment of GAAR<\/b><span style=\"font-weight: 400;\"> to allow adequate preparation for its implementation.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>Technology and ICT:<\/b><span style=\"font-weight: 400;\"> Promote greater use of <\/span><b>ICT and digital systems<\/b><span style=\"font-weight: 400;\"> to improve tax administration and taxpayer services.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Tax Administration Reform Commission (TARC), led by Parthasarathi Shome, proposed reforms to improve tax administration, taxpayer services, transparency, technology and compliance in India.<\/p>\n","protected":false},"author":27,"featured_media":124031,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[786],"tags":[10191],"class_list":["post-124059","post","type-post","status-publish","format-standard","has-post-thumbnail","category-general-studies","tag-parthasarathi-shome-committee","no-featured-image-padding"],"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/124059","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=124059"}],"version-history":[{"count":3,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/124059\/revisions"}],"predecessor-version":[{"id":124082,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/124059\/revisions\/124082"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/124031"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=124059"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=124059"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=124059"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}