In first remarks on the Paradise Papers after being named Finance Secretary, Hasmukh Adhia Tuesday said though it could take some time to sift through the data for actionable inputs on tax evasion, the evaders won’t be able to escape the consequences.
“(Action) depends on quality of data, but one thing is sure… that it does take some time but then, there is a way to reach up to them. They cannot escape. Hopefully, we will be able to get some more information. All these things are happening at a time when internationally there is consciousness about tax evasion. So, automatic exchange of information and all this is going to help us,” Adhia told The Indian Express.
Adhia said that investigative reports such as the Paradise Papers and Panama Papers are helpful and will make people think twice before engaging in tax evasion through tax havens.
“All this exposé, which are coming out, they are very welcome because people have so far taken it for granted that nothing will happen to them if they invest outside India through such tax haven routes. Such information is actually making them more vulnerable now. So, more and more people will now think twice before getting into any such adventurism. This kind of information is very welcome. I think people should now understand that straight vyavahar (behaviour) is better, instead of going to other countries and trying to do something,” Adhia said.
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On investigations carried out by the Income Tax Department on the Panama Papers, the Finance Secretary said it took a lot of time to determine actionable cases since information about companies in the reports was “bare minimum”.
“There is a lot of lead time required before we access actual actionable information. The information report was bare minimum. Based on that, you have to construct the entire tax (chain), find out where their operations are, go to that country, ask for bank information. In many of the cases, the directors are missing or the directors say that we were not there or we never gave consent or we were there at that time only for a short while, then we resigned from there… That is how it took a lot of time and it will take some more time. But finally, results will come,” he said. Why the Paradise Papers matter
He said the tax department would proceed in a similar manner for Paradise Papers as well. “We don’t know how good is the quality of information, but we will see,” he said.
Meanwhile, Finance Minister Arun Jaitley, addressing a press conference Tuesday, said the government will consider each case brought out by the Paradise Papers on “individual merit”.
Jaitley too said the probe into the Paradise Papers will follow a process similar to the one undertaken in the Panama Papers investigation. “It will be found out that who are those people with totally illegal accounts and who have plausible defence… Every case will be considered on its individual merit,” he said.