Direct taxes code to provide environment conducive for foreign investments: FM
FINANCE MINISTER ADDRESSES PARLIAMENTARY CONSULTATIVE COMMITTEE OF FINANCE MINISTRY
The government will take inputs from various stake holders before giving final shape to Direct Taxes Code, said the Finance Minister Shri Pranab Mukherjee while addressing the second meeting of the parliamentary consultative committee attached to the Ministry of Finance, here today. This was the second meeting on the issue of ‘Direct Taxes Code’. Thanking the Members for giving their valuable suggestions during the first meeting of the Consultative Committee held on 4th November, 2009, Shri Mukherjee said since the subject of direct tax touches directly or indirectly the lives of millions of individuals in the society, the suggestions and concerns raised by the esteemed members of the committee, who are direct representative of people, is of great importance in finally shaping out a policy relating to taxation regime in India, which can meet aspiration and expectation of our younger generation and also of our globalised corporate sector.
The Finance Minister stated that the important issues which have been raised during interaction with other stakeholders – Trade and Industry representative bodies and Civil Society Organizations and also by members during the first meeting of the Committee include –
(i) Minimum Alternate Tax (MAT) on gross assets
(ii) Provisions relating to taxation of foreign companies, residential status of foreign companies – their control and management etc.
(iii) General Anti-Avoidance Rule (GAAR).
(iv) Taxation of charitable organizations.
(v) Shift from EEE to EET method of taxation of savings.
(vi) Capital gains taxation.
(vii) Taxation in the case of salaried class employees.
(viii) Taxation of income from house property.
(ix) Deduction of interest on housing loan etc.
The Finance Minister assured the members that the above identified issues are under deliberation and a considered view would be taken on these issues.
Shri Mukherjee said that the Code is aimed at giving a competitive edge to the country while dealing with international taxation issues. In the Code there is a provision for Advance Pricing Agreement (APA). This mechanism has been proposed to bring certainty and stability in the taxation of cross border transactions. The Dispute Resolution Panel (DRP) already introduced with effect from 1st October, 2009 for Disputes relating to Transfer Pricing along with APA would provide a fiscal environment conducive for foreign investments in India. The Trade and Industry has been demanding the Alternate Dispute Resolution for transfer pricing related issues for quite some time. I am sure these new initiatives already taken and proposed in DTC will check avoidable litigations with resident as well as non-resident tax payers, added the Minister.
The Finance Minister emphasized that the Code should not be compared with the Income-tax Act, 1961 as the attempt is to move forward on the basis of a broad tax base, moderate tax rates, effective implementation strategy and better delivery of services to the tax payers.
The meeting was attended by S/Shri Shantaram Naik, Rahul Bajaj, Rajeev Chandrasekhar, Sabir Ali, Mukut Mithi, N.K. Singh, and Dr. E. M. Sudarsana Natchiappan - members of Rajya Sabha and S/Shri Partap Singh bajwa, Mukesh B. Gadhvi, Suresh C. Angadi, T.R. Baalu, M. S. Reddy, Neeraj Shekhar and Smt. Rajkumari Ratna Singh - members of Lok Sabha. Minister of State for Finance Shri Namo Narain Meena, Finance Secretary, Revenue Secretary, Expenditure Secretary, Disinvestment secretary and other senior officers of the ministry attended the meeting.