The Tax Administration Reforms Commission (TARC) headed by Dr. Parthasarathi Shome submitted its report in four volumes containing a total of 385 recommendations that pertain to Central Board of Direct Taxes (CBDT) and 201 recommendations that pertain to Central Board of Excise and Customs (CBEC). The broad recommendations inter-alia include changes in structure, improvement in taxpayers service, enhanced use of information and Communication Technology, exchange of information with other agencies, strengthening of human resource management, Key Internal Processes, Customs Capacity Building, Impact assessment, Expansion of Base, Compliance Management, Revenue Forecasting, Predictive Analysis and Research for tax Governance etc.

Two new bodies namely Tax Policy Council (TPC) and Tax Policy Research Unit (TPRU) have been set up for making recommendations on tax policies and other policy matters. Vide the Department of Revenue’s Office Order dated 02.02.2016, the Government has set up a ten Member Tax Policy Council (TPC) under the Chairmanship of Hon’ble Finance Minister with an aim to have a consistent and coherent approach to the issue of tax policy and having regard for need to have an inter-disciplinary approach. The Council will look into all research finding of the Tax Policy Research Unit (TPRU) and suggest broad policy measures for taxation. The Council will be advisory in nature and will help the Government in identifying key policy decisions for taxation.

Vide the Department of Revenue’s Office Order dated 02.02.2016, the Government has also created the Tax Policy Research Unit (TPRU) under the direct supervision of Revenue Secretary to carry out the research on the basis of empirical data. The TPRU will carry out studies on various topics of fiscal and tax policies referred to it by CBDT and CBEC and will provide independent analysis on such topics, prepare and disseminate policy papers and background papers on various tax policy issues, assist TPC in taking appropriate tax policy decisions and liaise with State Commercial Tax Departments.

As per the terms of reference, these bodies are permanent bodies and no periodic reports are expected.

This was stated by Shri Jayant Sinha, Minister of State in the Ministry of Finance in written reply to a question in Rajya Sabha today.

Tax administration reform establishes permanent Tax Policy Council and Research Unit to guide evidence-based tax policy decisions. Recommendations target comprehensive tax administration reform across direct and indirect tax authorities, emphasizing organizational restructuring, taxpayer services, ICT adoption, inter-agency information exchange, human resource strengthening, and analytical capabilities such as predictive analysis and revenue forecasting. Two permanent bodies have been established: the Tax Policy Council (TPC) as an advisory body to review research and suggest policy measures, and the Tax Policy Research Unit (TPRU) under the Revenue Secretary to conduct empirical studies, produce policy papers, assist the Council, and liaise with state tax departments.