By K. Ashwin Mob: 00919920183006 E-mail: firstname.lastname@example.org
A significant seminar which would have far reaching consequences for the Indian economy titled “Emerging issues and possible consensus on issues arising on provisions relating to GAAR and amendment in Section 9 transfer pricing under the income tax act – industry and professionals perspective” was held at the Indian Merchants’ Chambers. The IMC in a proactive effort organized this seminar under the auspices of its Direct Taxation committee.
Niranjan Hiranandani, President, IMC said that this seminar would bring about a transformation in the minds of people about the way they thought about the country and stressed on the importance of inclusiveness. He referred to the uncomfortable tax policy of the government, too, particularly due to retrospective amendments, to overrule court decisions.
Dr Parthasarathi Shome, Chairman of the expert committee on GAAR, chief economist, Her Majesty’s Revenue and Customs (HMRC), United Kingdom and Advisor to the Indian Finance Minister (2004-08) delivered the key note address. He took an overview of taxation scenario in India and dealt with the growth in tax revenue. He also referred to the role of the public sector in this context. The growth of the corporate sector had led to an unprecedented growth in the corporate revenue. If the centre and the state governments worked together GDP would improve and indirect taxes would decline. India was closely following the international pattern. The VAT had risen steadily in the last 2-3 years.
He mentioned that in many emerging economies the concept of revenue target is not existent anymore. The tax gap is being continuously minimized. We need to move from revenue maximization to minimization of the tax gap. The introduction of VAT in India had taken a long time, roughly 10 years till it began in 2005. He reiterated that it was very important to have the right structure in GST. Today there are different types of GST which are levied on goods like petroleum, alcohol and tobacco. These goods have not been left out of the GST ambit in any country of the world.
Referring to the situation in the UK, he said the issue of CFC (controlled foreign companies) took a long time to be consulted and result. Coming back to India, he referred to many businessmen leaving for foreign shores like southern Europe and the need to attract them. He concluded that the tax administration in India had improved by leaps and bounds over the last 7-8 years. However, he felt lot more is desired from them in the emerging economies, so as to have harmonious view in tax policy and implementation, without harassment to tax payers.
The presentation was followed by an interactive panel discussion which included interesting case studies. The discussion was chaired by Dinesh Vyas, Senior advocate and the panelist included Pranav Sayta of Ernst & Young, Gautam Doshi of RADAG, F N Subedar of Tata sons and Bela Sheth of Shell India. In the question & answer session thought provoking questions like “can we have focused anti-avoidance rules like in the UK instead of general anti-avoidance rules?” came up for discussion. In the wake of Dr. Parhtasarathi Shome being the Chairman of the Expert Committee on GAAR, the seminar occupied a position of great importance and the learned panelists and audience agreed that his report had thrown up worthwhile solutions.