India Advantages – Vision 2020

Mr. Vimal Gandhi President of ITAT, President of AOTCA. Mr Gill Levy, Mr Bharatji Agrawal Sr. Advocate and countrywide President of AIFTP, Dr ok. Shivaram, Chairman of international, Tax conference Committee, Mr. M.L. Patodi the Dy. President AIFTP, foreign delegates, delegates from distinctive elements of our country, members of ITAT, income Tax Tribunal, ladies and gents.
I am honoured to be invited to Inaugurate this primary “worldwide Tax conference” of AIFTP, which is held at Mumbai that is the economic hub of India. I am overjoyed to understand that greater than 50 overseas delegates from 10 countries are attending this conference.
Sitting on the tax bench of excessive court of Bombay I had an possibility to address numerous complex issues which include the provisions of Double taxation agreements, OECD Commentaries and so forth. In one case the issue worried turned into whether or not the Singapore agency having no everlasting establishment in India may be assessed to enterprise earnings thru its retailers in India for canvassing advertisements, we have held as there has been no commercial enterprise connection, the Singapore company cannot be assessed right here.
Let me proportion with you our experience in the excessive courtroom at Mumbai in Mumbai, we’re making a completely honest attempt to deliver down the pendency of cases in high Courts. New matters that are filed, arise for admission within seven days of submitting of the Petition. Depending on the technique of the Bench, even if the petitions are admitted, they will come up for final listening to inside two years. My non-public method has been to eliminate ninety% of the matters at admission level itself after giving an opportunity to the respondent
I am of the opinion that an global seminar like this, offers an opportunity to the Advocates and Chartered Accountants to examine in depth the global taxation problems to better equip themselves.
The topics decided on for discussion are, of severe essential they in nowadays global state of affairs. They are:
a) Doing enterprise in India,
b) Doing business in Australia,
c) switch Pricing,
d) Double taxation agreements,
e) VAT – assessment
f) Mergers and Amalgamation.
And,
g) contemporary traits in international Taxation.
.. There has been a few problem in criminal circles, both in India and overseas approximately the judgment of the Indian ideal courtroom in undertaking international vs. Satyam computer systems mentioned in (2008) four SCC 190. The said judgment has authorized the set apart of foreign awards in India even when India isn’t the seat of arbitration. A taken into consideration evaluation of the judgment would require that one of these challenge be tempered. First off, the said choice isn’t indicative of any nationalistic technique being adopted with the aid of the preferrred court docket ..
The law on the above subjects has many grey regions. In most regions it’s far evolving. This is why it’s miles frequently said, that time and experience facilitates to better recognize and interpret the regulation. This Seminar i’m sure will help immensely to construct a superb platform for the specialists in growing their expertise on the subject of transfer pricing, worldwide taxation, amalgamations and mergers. Such seminars additionally brings collectively people from different regions and permits a better understanding of our cultural diversities and the worldwide financial system.
I am positive the two days discussion could be very fruitful.
1. Technology
Technological improvements have eliminated the geographical boundaries. The world has have become one international village. The speedy improvement of electronic commerce (E.Trade) as a medium for doing commercial enterprise has now end up more hard for tax government. Profits-tax Act, and Double tax avoidance Treaties are based totally on the geographical region and physical presence, consequently the maximum crucial problems of taxation of e trade is,
whom to tax?,
when to tax ?
Wherein to tax ?
And who has jurisdiction to tax?
The high powered committee on E. Trade constituted by means of the critical Board of Direct Taxes in India has forwarded its reviews to government .The expert committee opined that the present profits tax law in India is not broad enough to tax transactions regarding E. Commerce. [( 2001) 251 ITR St 118]. The regulation with regards to taxation of E. Trade is yet to increase.
On the subject of area name, our high court docket in Rediff communique Ltd. Vs. Cyberbooth AIR 2000 Bombay 27 has held that the net domain names are of significance and may be a precious corporate asset. The area name is extra than a web address and is entitled to same protection as trademark.
2. Innovative movement of India in the direction of delicensing and deregulation
The guidelines of the government have changed substantially for the reason that 1991, the yr in which our financial system spread out to foreign investment in a huge way. Privatisation, liberalization, funding pleasant rules, and progressive reform technique have ended in giving a massive boost to our economic system. Nowadays foreign Direct funding is authorized in nearly all sectors barring few sensitive regions along with defence. In addition FDI is allowed in most of the sectors underneath automatic direction, except in a few instances, in which approval from the overseas funding merchandising Board is required.
For attracting overseas traders government. Of India has liberalized forex control Act, delivered data technology Act, cash Laundering Act, right to data Act, Uniform value introduced Tax (VAT), and so forth. The Empowered Committee of state Finance Ministers has been entrusted with getting ready a roadmap for the creation of country wide degree goods and services tax, that’s in all likelihood to be added with impact from 1-4-2010. These are the steps in right route as consistent with the arena financial institution’s report ‘Doing enterprise 2010 – South Asia (SA)’.
In India, processes underneath 2002 Securitization Act have have become extra powerful, easing the process and decreasing the time required to shut a commercial enterprise.
3. Taxation gadget in India
India has a nicely developed tax structure with actually demarcated authority among kingdom Governments and neighborhood our bodies.
Vital authorities levies taxes on profits (except on agricultural profits which state government can best levy), Customs obligations primary Excise and carrier Tax.
Price added Tax (VAT) stamp obligation, state excise, land sales and professional tax are levied by way of the kingdom Governments.
Local bodies are empowered to levy tax on homes, octroi and for utilities like drainage, and so forth.
Indian taxation machine has passed through superb reforms at some point of final decade. Fees had been rationalised and tax legal guidelines were simplified resulting in better tax compliance and higher enforcement. We’ve a totally mature tax machine and tax management. There’s an ongoing system of tax reform. The new Direct taxes code has been in dialogue to simplify the tax law and administration. Corporate tax fee in India is only 35% that’s taken into consideration as one of the lowest inside the developing nations. As in keeping with the proposed Direct taxes code, The proposed uniform company tax costs may be 25 in step with cent for both home and overseas agencies, As in step with the paper file dt 6-11-2009 (monetary specific). Our Finance Minister has stated that “we are trying to bring the new taxation regime, that could remaining for another 50 years. Therefore our endeavour is to look that new tax machine have to include the basic capabilities and time tested procedures of existing Act which have survived judicial scrutiny over time”.
4. Proposals for charter of hello-Tech rapid song industrial divisions in excessive Courts
With rapid increase in trade and change, industrial disputes related to high stakes are in all likelihood to growth. Overseas buyers in India have to be confident that the Indian Courts are as speedy as the Courts in maximum of the developed countries of the arena and there are now not prolonged delays within the judicial technique. With this in thoughts the law fee of India of their 188th document – December 2003 recommended for charter of high-Tech speedy-track commercial divisions in high Courts. At the conference of the leader Ministers of States and the chief Justices of numerous high Courts which was hung on August sixteen, 2009 took the selection that business department be constituted with the aid of the excessive court within itself as and whilst rules in this regard is made and notified via the Parliament. The bill is probably to be delivered in the winter consultation of Parliament this can assist the overseas buyers in a big way. The industrial division will be geared up with all excessive–tech systems and –online submitting device. These courts will be much like the economic Courts of new York, uk and Singapore.
Allow me share with you our revel in in the excessive courtroom at Mumbai in Mumbai, we are making a very sincere try and bring down the pendency of instances in high Courts. Mumbai contributes extra than forty% of direct taxes sales, additionally, 50% of the tax litigation. The pendency of tax litigation now could be very nominal because of the efforts put in by way of the Tax Benches. Among 2007-2009 with the aid of the joint efforts concerning income Tax branch, profits Tax Bar, Registry of the courtroom over 12,000 matters were disposed of. For that reason, as of now, other than writ petitions, the pendency of tax topics is about 1,three hundred. New matters which are filed, arise for admission inside seven days of filing of the Petition. Depending on the technique of the Bench, even if the petitions are admitted, they’ll arise for final hearing inside two years. My private technique has been to take away ninety% of the topics at admission stage itself after giving an possibility to the respondent.
Before the income Tax Appellate Tribunal which is final fact finding authority, the pendency is only forty two,000 appeals. These subjects are disposed of within 365 days of filing of the attraction, even at Mumbai and in smaller locations within six months.
Consequently as some distance as tax litigation is concerned there may be no uncommon postpone in disposal of tax subjects. I might also proportion with you that there’s entire transparency in the functioning of Courts. The purpose listing is to be had on the respective web website online of courts and all orders of high Courts and superb court are to be had on website online. Sitting in any a part of the sector it is easy to get entry to it and employ the equal.…

War Against Corruption And Black Money in Russia

Probably, someone who publicly accuses sure kingdom officials in Russia of corruption becomes himself a subject of criminal prosecution. Corrupt pinnacle-level officials tend to preserve their cash in foreign banks, while in Russia they haven’t any assets of their personal – their luxurious cottages and luxury motors are formally registered to spouse and children or straw men. Even an eye fixed really worth masses of hundreds of dollars can seem like a present from an antique friend or family member and is never linked with the official’s expert activity. Although they’ll stay in brilliant mansions and spend hundreds of heaps of greenbacks abroad, whilst in Russia, Russian officers are sincere humans of modest manner. That is what even the maximum thorough inspections performed internally in the occasion of corruption allegations generally display. As a result, those accusing officials of corruption turn out to be slanderers and are charged with against the law.
In a democracy, the ones in strength continually represent the hobbies of 1 or another social organization. An authentic’s career relies upon on whether he selects the proper social organization to represent and the diploma to which this organization shapes public opinion.
In present day Russia, the state of affairs is definitely extraordinary –– an official’s career never without a doubt hinges upon any social institution, however as an alternative relies upon absolutely on his courting with the small range of people also endowed with authorities powers. Those humans are basically divided into  organizations –– the ones on whom an legitimate’s appointment and merchandising rely, and those who can cast off him from office. In this paradigm, there’s no function for society, and regular citizens are absolutely dissociated from the procedure. As a end result, at all tiers, the government relies upon entirely on itself.
Consequently, with a view to in reality combat corruption in Russia, it’s miles important to create a lawful and doable mechanism to allow the population to consider officers from all branches of federal and local governments. The proper to provoke a don’t forget of this kind ought to be vested in a civic organization this is unbiased of the government.
This mechanism could sell a reduction of corruption by using the authorities, because corruption is always connected with the terrible first-rate of work via authorities officers; in fact, corruption replaces their work. The cutting-edge big exercise of buying political places of work turns into in large part meaningless. On the equal time, the level of protection for people who document corruption will dramatically boom.
But the problems of preventing corruption reach past Russia’s borders. There are many nations that provide easy schemes to launder corrupt cash and channel it to the yank and european monetary markets. Moreover, country wide law enforcement corporations are often not able (or unwilling) to behavior pre-research inquiries into corruption outdoor their restrained jurisdiction, especially in international locations in which property is effectively protected through the system of kingdom government.
To fight this hassle, a special United nations center need to be created to combat corruption and guard witnesses. This center might incorporate a single supranational body to develop and manipulate a unified international witness protection application along side a undertaking pressure legal to behavior additional investigations of corruption allegations against pinnacle officers’ allegedly unearned financial assets and overseas belongings. If this records is confirmed, relevant substances might be submitted to the national law enforcement agencies of all countries concerned for them to take action according with applicable country wide legal guidelines. The same body ought to be entitled to offer witnesses reporting corruption with worldwide criminal safety and immunity from prosecution at some stage in the duration of the investigation.
Clearly, this can be interpreted as interference in the internal affairs of the international locations in question. But, efforts to shrink corruption, which includes proceeds stored and used past country wide borders, can now not be handled as the inner affairs of the relevant usa or as the exclusive domain of the countries wherein a excessive-ranking authentic resides – if for no other purpose than due to the fact that unlawful profits will eventually be moved freely and legally out of these nations and all around the global. If there’s no system to make these cash transfers extremely difficult, if no longer not possible, there might be no hope in any respect in winning the struggle towards corruption.…

Vodafone Retro Law Change Is A Failure Of National Governance: Dinesh Vyas

Eminent Senior recommend Shri. Dinesh Vyas expresses soreness at the covert way in which the retrospective amendments to nullify the judgement of the ultimate court docket in Vodafone worldwide vs. UOI had been delivered inside the Finance bill 2012 without any reference being made to it within the Finance Minister’s finances speech. Given the dimensions & importance of the issue, the lapse of the Finance Minister is deliberate and a failure of countrywide governance requirements, he says, and adds that the government’s clumsy try to change the law has triggered, among big-price ticket foreign investors, a loss of religion & self belief in India as a reliable funding vacation spot
The reality of the matter is that this. Sachin Tendulkar’s hundredth century become the turning point in the journey of Union budget 2012-13 and after this the interest of an average Indian in the complete Budgetary system receded and went down and down. However by the point the hundredth run turned into scored, the average Indian had reached to the subsequent conclusions with regard to the price range.
The Finance Minister changed into playing a sport of political survival in New Delhi at the same time as the game of ODI changed into being played in Mirpur, Bangladesh. The strive became to have a smooth crusing without disturbing further the political stability. There was no most important reform programme to be presented before the Parliament. There has been no preference to please the company world. The not unusual man changed into to be thrilled to maintain the vote financial institution intact. In short, the government had no terrific agenda apart from to remain in electricity.
A very essential problem of the country wide governance is thrown up. The amendment is probably to address earnings-tax of approximately Rs.Forty,000/- Crores. If this became so, turned into it no longer certainly imperative that this problem turned into covered via the Finance Minister in his speech itself whereby he should inform the Parliament and the country at massive that this is what he has accomplished?
The common guy knew that the deficit financing which the Finance Minister become dealing with turned into a ball of hearth. He himself had admitted in his price range Speech that for the better a part of the past two years we had to struggle a close to double digit inflation. Nothing foremost had happed to comprise this inflationary fashion. The additional burden placed within the realm of Excise duty and provider Tax become in reality possibly to have cascading impact.
The common Indian had consequently properly understood that the raising of the income-tax exemption restrict from Rs.1,eighty,000/- to Rs.2,00,000/- become meaningless and changed into best a necessary adjustment warranted to keep tempo with the upward price motion. The internet impact, but, with reference to the extra taxes changed into that as against the government’s direct tax lack of Rs.Four,500/- Crores, there has been a gain of Rs.45,940/- Crores due to increase in indirect taxes ensuing in a net extra burden of Rs.41,440/- Crores on the nation. The not unusual guy had therefore examine through the situation, had come to the realization that there may be little or no to cheer him in this finances and therefore the fine way to get cheered changed into from Sachin’s hundredth century.…

Anna Hazare’s one little finger is enough …..

You do not require a magic wand to combat corruption. One little finger raised by Anna Hazare is enough. The seventy four year vintage Gandhian confirmed the nation how purity of concept integrated in to proper movement can carry down a tyrant government to its heels.
The nation machinery placed this man in prison and ended up self locking themselves with the aid of their very own misdoings. They did no longer want to provide him public space to maintain his non violent rally for extra than 3 days and set a cap for 5000 campaigners. And now, they’re hastily cleaning a public ground themselves to make it fit for his rally for fifteen days without any limit set for the members.
The government has absolutely placed its foot in its own mouth. None of the felony luminaries in the authorities spokesmen could convince the common man on the street that energy to decide a law rested best with the legislators and that the commonplace man has no say there. Arvind Kejriwal, the RTI activist and Anna’s associate, talking on behalf of the civil society, spelt out in clean terms that it changed into in no way their demand that simplest their version of the Lok friend invoice have to be exceeded inside the Legislature.
None of the legal luminaries in the authorities spokesmen may want to persuade the not unusual man on the street that electricity to determine a regulation rested only with the legislators and that the commonplace guy has no say there
at the opposite, their demand was that their draft of the invoice ought to also be presented in the Legislature for attention as well. Sarcastically, none of opposition parties even ventured to introduce a private invoice on group Anna’s model even though they vehemently adverse the treatment meted through the government to Anna and his fellow campaigners. Their aid for Anna became therefore superficial concealing it the only a hidden one point time table- to bring government down rather than help Anna’s purpose.
Anna is now on his fast. Throughout the duration and breadth of this great state, there’s presently no better and adorable leader than Anna. His integrity is unimpeachable.
Anybody therefore unconditionally stand by means of him.
… is the Gandhian manner of protesting through fasting the simplest manner we are able to carry a people’s mandate in to a making? Do we need to rapid while the corrupt politicians eat and belch? What occurs if one folks dies on account of fasting?
But, assuming that he will succeed in achieving his cause; several questions still plants up in our minds? First of all, is the Gandhian way of protesting through fasting the best way we will deliver a people’s mandate in to a making? Can we must rapid even as the corrupt politicians eat and belch? What occurs if one people dies on account of fasting? As a revolutionary society, is there no manner by means of which we are able to consider protesting in a higher manner than fasting and nonetheless gain our ends? These are the questions we should also be asking ourselves. And by way of asking those questions, we are not committing any disrespect to our heroes – either Gandhi or Hazare.…

Dear Income-tax Department, ‘Thank You’ For Ruining Indian Economy

Jaithirth Rao, entrepreneurial whiz-kid, has launched a blazing attack on the profits-tax branch for its arbitrary policies which is forcing massive blue-chip MNCs to shift their BPOs from India to more reasonable international locations.
In a thought-scary article in the Indian specific, Jaithirth Rao spoofs a letter from the Finance Minister of Philippines to the Finance Minister of India “thanking” the latter for the “vicious harassment” that the earnings-tax branch has heaped at the Indian IT and BPO industries which has prompted a shift of BPO organizations from India to the Philippines.
The earnings-tax department is elevating tax demands on captive devices of global corporations using their international income as the premise and factors out that this one selection by myself might reason several of those corporations no longer best to stop growing their Indian subsidiaries, however truely begin winding them down
Jaithirth Rao factors out that the profits-tax branch has released a ‘concerted method‘ during the last several years by making common and arbitrary adjustments in policies and says that this has ended in “vicious harassment” of Indian IT and BPO industries.
In sarcastic & dying-gallows humour, Jaithirth Rao says that Philippines counts the Indian earnings-tax authorities among its “high-quality pals” and requests that the names of the “worth individuals” who’re in the back of this “tremendous strategy of weakening this labour-in depth Indian enterprise” be given so that they can be provided special “Magsaysay Awards” and be honoured as “friends of the Philippines”.
On a extreme note, Jaithirth Rao points out that the Indian income tax government are mainly concentrated on captive BPO businesses, which had been till recently being appeared because the “poster-boys of Indian I. T. Industry“, by using asking them to re-compute their taxable earnings based on arbitrary and converting switch pricing suggestions with out good enough safe harbour provisions, which might be not unusual in most nations.
While in forums just like the WTO, India has been vehemently arguing in favour of free motion of labour and opposing the stand of the us political agencies that it isn’t always “body-shopping”, the profits tax branch has taken the reverse role that sales from such sports do now not represent “service exports” and that it without a doubt is “frame-buying”
He says that this “capricious behaviour” has resulted in many captive units stopping the increase in their Indian BPO clothes and accelerating the increase of their gadgets in overseas countries.
He also laments that the income-tax department is elevating tax needs on captive gadgets of world organizations the use of their global income as the idea and points out that this one decision alone would cause numerous of those agencies no longer best to forestall developing their Indian subsidiaries, but simply begin winding them down.
Jaithirth Rao says those “enterprise-unfriendly” ideas of the profits-tax department will decrease the Indian BPO industry and while these “rapacious tax needs” will in due course be struck down via the courts, in the intervening time, the corporations will ought to pay up, be out of coins and will be spending their time and money on expensive tax legal professionals as opposed to that specialize in their operating companies. In this unlucky situation, all BPOs near save in India and move to the Philippines and China, he says.
Jaithirth Rao additionally points out that at the same time as in forums like the WTO, India has been vehemently arguing in favour of free movement of labour and opposing the stand of the usa political groups that it isn’t always “frame-purchasing”, the profits tax department has taken the reverse function that revenues from such activities do no longer constitute “carrier exports” and that it in reality is “frame-purchasing“. He says that the earnings-tax branch’s stand “fatally undermines” the sovereign function of the government and strengthens the hand of the usa political groups which want to impose change boundaries on Indian corporations.
The income-tax department is “determined to wreck one of the few industries where India has completed international elegance and wherein Indian organizations are considered bold operators” and their movement of reopening past exams and raising large untenable needs with the aid of terming “provider export revenues” as “body shopping sales” (notwithstanding in advance explicit and emphatic assurances that on-site undertaking implementation revenues could be treated as export earnings) is forcing huge & successful world class businesses to flee India. He says that this flight of capital is making China & Philippines “salivate” at the chance of global groups putting in operations in those countries in desire to India.
In place of the unreasonable stand followed by the earnings-tax branch, the sales in Philippines & China have decided to do exactly the alternative and are affordable in their tax needs, easy and obvious of their transfer pricing rules and generous of their tax holidays, he says.…