High-level committee to deal with tax issues

The Dollar Business Bureau The Union Finance Minister, Arun Jaitley, on Monday, stressed on need for a non-adversarial taxation policy, as he made clear that the Government of India will not impose ‘retrospective’ taxes. “Our taxation process has to be simpler to increase tax buoyancy and the taxation policy has to be non-adversarial. The government does not intend to tax people retrospectively,” said Jaitley, addressing the D P Kohli Memorial Lecture in New Delhi. Further promising a business-friendly environment for the global investors, the Union Finance Minister called for a globally competitive corporate tax structure. He stated this in reference to the Union Budget 2015, where the government has proposed to reduce the corporate tax from 30 % to 25%. Meanwhile, in another case, he informed that the Government of India will be setting up a high level committee to sort out the issues on taxation and make the system predictable. “I am considering a high-level committee to explore what can be done to resolve the past and move beyond it in a way that would provide real predictability and certainty to investors,” read Jaitley’s written statement, according to the sources. Informing that the decisions regarding the levy MAT on foreign investors were taken by the judicial bodies created before a new government has been formed, the Union Minister reassured the investors of a tax system free from political-interference. On the issue of ‘notices sent to the 68 FIIs for payment of dues totaling Rs 602.83 crore towards MAT, he said the ruling could be contested in the court and also informed that these rulings cannot override India’s international tax treaties. Tax payers would henceforth be treated as partners, but not as the hostages or victims, Jaitley said, adding that the government has ensured fair treatment of certain kinds of contentious transactions, clarified rules on transfer pricing, among others. As he spoke on the plans for the fiscal road map, Jaitley raised concerns over the challenges being faced by the key Indian sectors like Agriculture, Infrastructure, among others. He informed that the agriculture and infrastructure sectors are facing serious challenges due to lack of investments, highways programme has slowed down and the investments have not come for the Railway sector. An investment of Rs 70,000 crore is yet to be made in the infrastructure sector and this is the reason for the delay in fiscal road map, he added. However, the defence and real estate sectors have opened up for larger global investments, following the decisions taken by the new NDA government.      

This article was published on April 27, 2015 – 5:35 pm IST