New Delhi : The government has taken “one step forward” to resolve the retrospective tax cases by putting in place a statutory mechanism for ending such disputes, Finance Minister Arun Jaitley said on Wednesday.
The economic growth rate for 2015-16 has been estimated at 7.6 per cent, the highest in the last five years, says FM
In Budget 2016, he has made a one-time offer to firms facing tax liability on the retrospective tax front by way of waiver of interest and penalty if they pay up principal tax. Addressing industrial chambers during his post-Budget interaction on Wednesday, Jaitley said he had inherited retrospective tax cases, but has now taken “one step forward” towards resolving them. “I had hoped it (cases) would be resolved by courts or tribunal (where) issues are pending. But now, I have a statutory mechanism of resolving it and therefore, again we have taken the first significant step forward in order to be in a position to resolve this,” he said. UK oil explorer Cairn Energy is facing a tax demand of Rs 10,247 crore on a 2006 business reorganisation it carried out in its India unit before getting it listed. The company says it has paid all taxes due and there was no unpaid liability. It invoked India-UK BIPA to take the government to arbitration over the issue.
British telecom giant Vodafone is also facing tax liability over its USD 11-billion acquisition of a 67 per cent stake in the mobile-phone business owned by Hutchison Whampoa in 2007.
Govt can exceed growth target with less obstructions: Meanwhile, Jaitley on Wednesday exuded confidence that the growth rate in the next fiscal could exceed 7-7.75 per cent if there is less political obstructionism and the government is allowed to push through important Bills like GST and the bankruptcy law.
“With all the steps we have taken (in the Budget) and hopefully if the next financial year is politically not as obstructive as the last one (and) we are able to push through many more reforms, I am sure we will beat the target that Arvind (Subramanian) has set in the Economic Survey,” he said.
The minister was speaking during a post-Budget interaction with captains of the Indian industry. Chief Economic Advisor Arvind Subramanian, in the Economic Survey, projected a growth rate of 7-7.75 per cent for the next financial year, which some experts described as “modest”. The economic growth rate for 2015-16 has been estimated at 7.6 per cent, the highest in the last five years. Detailing the initiatives proposed in his Budget for 2016-17, Jaitley said the goods and services tax (GST) Bill and the bankruptcy law are pending in Parliament and the government will pursue them. The Constitution Amendment Bill to roll out GST, dubbed as the biggest indirect tax reform since 1947, is pending in the Rajya Sabha because of stiff opposition by the Congress. GST will subsume central excise, state VAT, entertainment tax, octroi, entry tax, luxury tax and purchase tax on goods and services and will bring about a uniform indirect tax regime throughout the country.
FM pledges all support to keep PSBs in ‘good health’ : Welcoming RBI’s easing of rules to allow lenders to bolster capital ratios, Finance Minister on Wednesday said the government will take all steps and provide resources to keep public sector banks in good health. During his post-Budget interaction with the industry, he said banking is a stressed sector and so the government is professionalising PSU banks and recapitalising them.
“RBI last evening took a very positive move which helps further in recapitalisation of banks,” he said. Easing rules on what banks can count towards their core capital requirement under the upcoming Basel III rules, the Reserve Bank of India allowed reserves associated with property revaluations and foreign-currency translations to be considered as common equity tier I capital.
