Saturday, July 26, 2014

Tax litigation will be simplified, assures Jaitley

New Delhi: In reply to a question about Rs 4000 crore locked in tax litigation, which includes tax authorities filing cases against individuals and companies for evading payment, or cases filed by private parties against the tax department for unfair assessment, finance minister Arun Jaitley said that it would be wrong to assume that government will get the Rs 4000 crore because it will depend on the outcome of the cases.

He said he is intending to make the proposed settlement commission effective to facilitate continuous dialogue between industry and the tax department and there will be “statutory notifications” about assessments. He said the most contentious issue has been that of “transfer pricing” and thousands of crores are locked up because of the cases. He said guidelines will be issued to simplify the procedure, and many of these guidelines will be incorporated in the finance bill.

BJP’s Ananth Kumar Hegde was quite insistent to know what is the road map for the simplification of the tax system. “I want a categorical answer, bullet-point answer,” he demanded. He quoted the taxation cases pending with the income-tax department as given in the written answer to his question, 2,88, 814 cases in 2012-13 and 98,425 in 2013-14, and the amount locked up was Rs 39997 crore for 2012-13 and Rs 15,715 crore in 2013-14, and the assets that were seized themselves amounted to Rs 36,153 crore. He said that Central Board of Direct Taxes (CBDT) had set itself the goal of achieving Rs 4000 crore while the money due is Rs 36000 crore. Hegde said he was not interested in the nitty-gritty about achieving targets but he was more interested in broader issue of simplifying the tax system, which has been the promise that the party made to the people at election time.

Jaitley said that direct tax collection, a major contribution being made by the income-tax payers, Rs 6,38,000 crore last year and it is projected to go up to Rs 7,36,000 crore this year. He said that the problem was not with the income-tax payers, who do voluntarily or through the tax deducted at source (TDS) system. But there are others who try to operate outside the system and who are tax evaders. It is to instill fear in these people and create deterrence that tax raids are conducted and seizures made, he explained.

Hegde went on to ask about a newspaper report about the action to be taken against 600 people who had accounts in foreign banks. Jaitley said that those persons who had bank accounts in Lichtenstein had been identified, and assessments have been completed and even criminal action have been initiated. He said that the newspaper report was wrong because it said that there was an exclusive list of Indians with accounts in Swiss banks. Jaitley said that the government had written to the Swiss authorities and they responded saying that there was a general list and there was no exclusive list of Indian account holders. He said some of the names in the list were those of non-resident Indians (NRIs) who did not come under the Indian tax ambit. He said that full information was not available with regard to others, and legal measures are being taken to get all the details of these other account-holders. He also conceded that the French had given the India a list of Swiss account holders which France had got hold of but these names could not be disclosed because of the commitment given by India.


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