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Journalism of Courage
Ahead of Budget 2015-16, a high-level panel set up to review tax laws has suggested that both the direct and indirect tax departments should withdraw all appeals pending in tribunals and courts, which are assessed to be without merit while a “special drive” should be carried out to “liquidate cases clogging the system”.
Emphasising the fact that the tax departments have more disputes than any other institution, the tax administrative reforms commission (TARC), headed by Parthasarthi Shome, said in its updated third report that within one year the two departments should review and liquidate cases by setting up dedicated task forces in the Central Board of Direct Taxes and Central Board of Excise and Customs.
“The objective of the exercise should be to decide on all cases pending in departmental channels for longer than a year as on the start date of the action plan… Pending cases similar to the ones where the departments have accepted a court judgement should also be withdrawn,” the report said.
The Cabinet had decided last month to not appeal against the Bombay High Court’s October 2014 decision on Vodafone’s Indian subsidiary, providing it a huge relief on taxes that it may have otherwise required to pay.
The government’s decision aimed at avoiding “fruitless litigation” provided a breather to several other multinationals which are entangled in similar tax disputes with the income tax department such as Shell, IBM and Nokia.
The panel also recommended that both the departments should give up their “silo-style working”and ensure that the revenue forecasting approach in the budget is balanced, transparent, and trusted.
Govt notifies Ind-AS rules
The government on Friday notified the rules for Indian Accounting Standards (Ind AS), which will be mandatory for companies from April 1, 2016.
The standards, which are converged with the international financial reporting or IFRS, are voluntary from April 1, 2015, while companies having networth of Rs 500 crore or more, would have to mandatorily comply with it from the next financial year. The roadmap for the implementation has already been laid out. Banking, insurance and non-banking finance companies are exempted from the roadmap.
Sai Venkateshwaran, head of accounting advisory services, KPMG India, in order to make the transition smooth, “related tax issues need to be addressed”.
