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Govt proposes to streamline processes to deal with corporate, tax frauds


New Delhi

Government proposes to further streamline and simplify the processes to deal with corporate and tax related frauds by identifying and instituting lead investigating agency for each case and only allowing that body to undertake the preliminary work.

This is expected to improve the overall quality of investigation while prevent inter departmental issues from resulting in delays.

At present, corporate frauds including tax related and economic crimes see involvement of multiple investigative agencies such as Income Tax Investigation, Directorate of Anti Evasion,

Enforcement Directorate (ED), SFIO, CBI, GST Investigation, Customs, DRI etc. This often results in duplication of effort and confusion with case being tossed between one investigative arm to the other without credible progress.

Sources said that government has discussed implementing the concept of lead investigation at a high level inter ministerial meeting and will prepare a draft for implementing it once views sought from other stakeholders

Several countries globally has the concept of lead investigative agency that established preliminary direction of investigations and brings in other agencies purely as a need based approach.

“Lead investigation agency concept is good. It needs study about the criteria for deciding the lead investigation agency to avoid inter departmental issues,” said a former top official of Central Board of Indirect Taxes and Customs (CBIC) who did not wish to be named.

Government has been looking at different ways to remove the clutter from tax and corporate laws as part of its efforts towards ‘Ease of Doing Business.’ As part of this, Finance Minister Nirmala Sitharaman recently announced the decriminalization of minor technical and procedural defaults under the Companies Act. She also dropped a few compoundable offences and put others to be dealt under alternative framework.

It is expected that the finance ministry in cooperation with other related ministries will prepare detailed guidelines for institution of lead investigative agency for a particular class of crime. Once this is put in place, every case will be handled by only one agency and others would be involved purely on need based for specialised support.

Also, as part of operational streamlining of investigative process, database may also be prepared by one investigation agency and shared with other agencies to avoid duplicacy. Like data sharing with GST, Banking and income tax department, will minimise duplicacies in investigations.

Moreover, all department would require to have manuals for investigation. If they don’t have one, it would have to be drafted while old manuals would need to be revisited for making necessary changes for streamlining the whole process.

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