Updated: March 6, 2021 1:25:03 am
In a reference to the recent income tax searches against filmmakers and actor from the Bollywood movie industry, Finance Minister Nirmala Sitharaman said the same persons were raided in 2013 as well, but no issue was made out then as it is being done now. Refusing to comment on individual cases, she said it is in the national interest to know if some evasion is happening, when asked about income tax searches against Bollywood actor Taapsee Pannu and filmmaker Anurag Kashyap.
“First of all, I am not commenting on any A or B individual. (But) since the names were taken, (I want to say) the very same names were raided in 2013,” she said in an interaction with journalists at IWPC (Indian Women’s Press Corps). It “wasn’t an issue (in 2013). It’s an issue now,” she said.
Kashyap had faced investigations by tax authorities for alleged service tax evasion in 2013. Sitharaman, however, did not talk about the outcome of the 2013 raids and if any follow-up action was taken in the last seven years.
The Income Tax Department on March 3 began raids on the entities connected to Pannu and Kashyap as well as his partners, who launched the now-shuttered production house Phantom Films. The searches, part of a tax evasion probe against Phantom Films, carried out across 30 locations in Mumbai and Pune, also covered Reliance Entertainment group CEO Shibhasish Sarkar and some executives of celebrity and talent management companies KWAN and Exceed.
The raids had elicited strong response from the Maharashtra state government which called it an attempt by the Centre using agencies to intimidate those who spoke out against the BJP government. Both Kashyap and Pannu have been critical of the ruling party and the Centre and questioned policies, including the National Register of Citizens (NRC) and Citizenship Amendment Act (CAA), and, most recently, the farm laws, on social media.
“Answer it for the hypocrisy or answer it, saying from then this is happening till now, what’s the matter (with now),” she said. “In the national interest, do we want to know if there is some evasion happening.
“I don’t know. I am not commenting on a particular case. But if that relates to particular names I want to ask – should we raise questions whether there was a serious omission and commission or should we raise a question about ‘oh it’s happening now’?” Sitharaman said. “Please look back. It happened in 2013.
The tax department in a statement on Thursday stated that search and survey operations were carried out in Mumbai, Pune, Delhi and Hyderabad, adding that it has allegedly found discrepancies of about Rs 650 crore.
Sitharaman also acknowledged that consumers have a case for petrol and diesel prices to be brought down but said a reduction in taxes to make that happen should be a joint call of the central and state governments. On the issue of bringing petrol and diesel under the Goods and Services Tax (GST) regime, which will end the cascading impact of taxes and bring uniformity, the finance minister said the call has to be taken by the GST Council, the decision making body of the indirect tax regime.
For consumers, “there is enough case to say that prices should be down, it’s a burden,” she said while interacting with journalists at IWPC.
She also indicated the government’s intent to appeal against an arbitration panel asking India to return $1.4 billion to UK’s Cairn Energy Plc, saying it is her “duty” to appeal in cases where the nation’s sovereign authority to tax is questioned.
“We have made our position clear on retrospective taxation. We have repeated it in 2014, 2015, 2016, 2017, 2019, 2020, till now. I don’t see any lack of clarity,” she said, referring to the Modi government’s stand of not raising any new tax demand using the 2012 legislation.
“Where I find an arbitration award questioning India’s sovereign authority to tax… if there is a question about the sovereign right to tax, I will appeal, it’s my duty to appeal,” she said. “An arbitration award, which questions the authority of the government to tax, I will appeal on that.”
The statement comes days after her ministry officials held three rounds of talks with Cairn executives, including CEO Simon Thomson to find a solution acceptable to both sides.
While the government has already challenged in a Singapore court an international arbitration tribunal verdict that overturned its demand for Rs 22,100 crore in back taxes from Vodafone Group Plc, it hasn’t yet done so against a December 21 award asking India to return the value of shares seized and sold, dividend confiscated and tax refund stopped to adjust a Rs 10,247 crore tax demand on Cairn.
The finance minister also said that the entire fiscal stimulus will be funded by borrowing and revenues but not from taxpayers. “The government is borrowing to spend, but it is not taking from people,” she said.
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