Written by: Santosh Tiwari
2 min readNew DelhiJul 13, 2013 01:21 AM IST
First published on: Jul 13, 2013 at 01:21 AM IST
While finance minister P Chidambaram was telling investors in the US his plans to make it easier for them to do business in India,his officials in New Delhi quietly moved out a key tax official widely seen as making things difficult for MNCs through several decisions including transfer pricing orders issued to companies like Microsoft and Shell.
The Central Board of Direct Taxes issued the order transferring SK Mishra,joint secretary in charge of the foreign tax division,on July 10,two days after Chidambaram left for the US.
Not only was Mishra transferred suddenly he had 18 months left in his current stint he was transferred without being told his new responsibility. The board is yet to decide his next posting.
Akhilesh Ranjan,a former director in the foreign tax division,who is now with the departments investigation arm in Mumbai,has succeeded Mishra.
Mishra was seen as the brain behind the retrospective amendments in the I-T law that triggered the Vodafone tax dispute,and the General Anti-Avoidance Rules GAAR,which spooked foreign investors. He was also a member of the committee on foreign tax credits,which recommended a dramatic tightening of the manner in which these credits were given.
Transfer pricing adjustments on MNCs jumped from Rs 44,500 crore in FY12 to Rs 70,000 crore in FY13. In the case of Microsoft,the taxman argued that since a part of the companys Ramp;D was done in India,and because Ramp;D was a big contributor to Microsofts global profits,a part of those profits could be said to have accrued to the firms Indian arm.
Two weeks ago,the finance ministry clarified the taxmans dealings with foreign Ramp;D centres of MNCs,signalling the shift in the governments stance.
The Financial Express
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