The Indian government has obtained data of investments made by hundreds of Indians in tax havens such as the British Virgin Islands,the Cook Islands and Cayman Islands,some of which was part of a global media expose on offshore investments and secret financial transactions two months ago.
The Central Board of Direct Taxes has begun examining the information.
The data about entities,registered by Indians through international financial service providers such as Portcullis Trustnet (PTN) of Singapore and the Commonwealth Trust Limited (CTL) in the British Virgin Islands,was provided by the Australian taxation office using the Tax Information Exchange Agreement.
Top government sources told The Sunday Express that tax authorities in Australia,Britain and the US had received identical data about such offshore investments,and they had decided they would share intelligence and documents which hint at suspected tax avoidance with other countries according to their jurisdiction. Subsequently,Indian authorities made a formal request for the data,sources said.
In the biggest global expose of its kind,an international group of investigative journalists had reported in April that they had found details of over 1.2 lakh offshore entities and trusts belonging to individuals and companies in more than 170 countries and territories,including India.
The data was obtained by the International Consortium of Investigative Journalists (ICIJ),which had collaborated with 38 media organisations around the world,including the The Indian Express,to analyse the documents.
The information showed that 612 Indians were among the thousands who had opened offshore entities through the CTL and PTN trusts. The 612 Indians included two members of Parliament Lok Sabha Congress MP Vivekanand Gaddam and RS member Vijay Mallya and several industrialists such as Ravikant Ruia,Samir Modi,Chetan Burman,Abhey Kumar Oswal,Rahul Mammen Mappillai,Teja Raju,Saurabh Mittal and Vinod Doshi.
Following the report,Finance Minister P Chidambaram had said inquiries had been put in motion about the names exposed by The Indian Express.
CBDT officials said that following the expose,each of the Indians named had been questioned about the companies registered in the tax havens. While some of the persons named said they enjoyed NRI status and thus could not be questioned on tax liabilities,others denied any knowledge about entities attached to their name. Only one or two persons acknowledged that they had indeed registered companies in tax havens. We are still in correspondence with them, a top official said.
With tax authorities now in possession of the entire data about the companies and trusts registered by Indians,the task of assessing tax avoidance in hundreds of cases is expected to become more daunting. However,unlike the sketchy details of bank accounts opened by 700-odd Indians in the HSBC bank in Geneva,information about the tax haven accounts includes data such as incorporation documents,names and addresses of beneficial owners and nominees and in many cases,correspondence and emails with the Indians.
The CBDTs scrutiny of the offshore account data comes at a time when the ICIJ is itself releasing on Saturday an interactive database of more than 100,000 secret companies and trusts created in offshore locations.