On Wednesday, the Union Cabinet approved the proposal to abolish Ombudsman institutions for direct and indirect taxes. The decision comes in the backdrop of the public's preference to choose alternative online mechanisms for complaint redressal and the failure of the Ombudsman to meet objectives.

In a statement released by the Ministry of Finance, it said that the alternative mechanisms "could not prove to be more effective than regular existing parallel channels of grievance redressal."

It further said, "The Institution of Income-Tax Ombudsman was created in the year 2003 to deal with grievances of public related to settlement of complaints relating to Income Tax. However, the Institution of Ombudsman failed to achieve its objectives. It was observed that institution of new complaints have in turn fallen to single digits. Also, tax payers started preferring alternate methods of grievance redressal like CPGRAMS (Centralized Public Grievance Redress and Monitoring System), AaykarSevaKendras etc. further, it was also decided in 2011 to close vacant offices of Indirect Tax Ombudsman."

The CPGRAMS is a web portal that allows submission of grievances by citizens at any time (that is 24/7) and from anywhere basis to Ministries/Departments/Organisations in India. Aayakar Seva Kendras, on the other hand, are specific to tax-related issues. They are single window systems for registration of all taxpayer application/return.