NEW DELHI: The government on Friday committed to a low-tax regime to promote industrial activity and promised speedy retrieval of black money stashed abroad, in addition to announcing some concessions for the mutual fund sector and income tax payers.
Finance Minister Arun Jaitley clarified that the government is moving fast to recover ill-gotten money stashed abroad. “I can assure that you don’t have to wait for long to see that we have brought back the black money,” the Finance Minister said in a reply given during the debate on the Finance Bill 2014, which was passed in the Lok Sabha on Friday by voice vote.
“The government will fully cooperate with the Special Investigation Team and whatever information we are receiving regarding the black money, we are providing it to the Supreme Court as well,” Jaitley said.
The Finance Minister also informed the House that India had written a letter to Swiss authorities on June 23. However, the government was informed that the Swiss authorities don’t have a separate list of Indian bank account holders.
In a separate written reply in the Lok Sabha, the Finance Ministry also revealed the government’s action plan to bring back the black money stashed in foreign banks. The government is supporting the uniform global standard on automatic exchange of information, on a fully reciprocal basis, to address the problem of taxpayers hiding their money in offshore tax havens through multilayered entities with non-transparent ownership. The government is also re-negotiating Double Taxation Avoidance Agreements with other countries and proactively engaging with foreign governments for exchange of information.
Touching on other measures, Jaitley said that in a bid to provide relief to taxpayers filing returns late, the CBDT will be empowered to exercise discretion on penalties.
Jaitley said that a low-tax regime and smooth-tax system would help revive investor sentiment “which has been disturbed” and would help mop up additional resources to fund social welfare activities.
Speaking about the proposed changes in the Finance Bill, Jaitley said, “They will be simplified further and the tax structure would be smoothened as it would help the country and help us in raising the revenue because this year we need higher revenues to meet fiscal deficit targets.”
In order to reduce mounting cases of tax litigation, Jaitley said he proposes to provide more benches of Advance Ruling to deal with transfer pricing disputes. Speaking about the concerns expressed by members over tax forgone, Jaitley said it is permitted under law and it eventually benefits consumers and makes domestic products price competitive.
Rejecting the Opposition charge that the government was giving tax relief to benefit corporates, Jaitley said it was a “misnomer” as tax concessions lead to reduction of prices and finally the consumer get the rebate.
Referring to the controversial General Anti-Avoidance Rules (GAAR), the minister said a final call on it will be taken later.