Jaitley slams ‘unsustainable’ taxes

New Delhi, November 22, 2014

 

‘If the government is not investor-friendly, people will start looking elsewhere’

 

Comments come in the wake of I-T department losing its battle against  Shell

Finance Minister Arun Jaitley on Friday said that an unsustainable tax demand would only earn the country a bad name as an investment destination. Mr. Jaitley’s comments come in the wake of the Income Tax department losing its battle against Shell in the Mumbai High Court.

“Unsustainable demand won’t get you taxes. Unsustainable demands in the books can show you in good glory, but eventually those taxes will be blocked in some judicial court proceedings... they would have only earned us a bad name as an investment destination,” Mr. Jaitley said at the HT Leadership Summit. He, however, maintained that those who are supposed to pay taxes must pay.

The Mumbai High Court order earlier this week went against the Income Tax department in its Rs.18,000 crore transfer pricing cases against oil major Shell India. The government is also engaged in a Rs. 20,000 crore tax dispute with British telecom major Vodafone.

Referring to retrospective amendments to the tax laws by the UPA government, Mr. Jaitley said, if the government was not investor-friendly, people would start looking elsewhere.

He further said making the taxation regime investor-friendly and streamlining the procedure for land acquisition were the big challenges facing the government.

The Minister, however, took comfort from the fact that taxation laws were the domain of the Lok Sabha in which the NDA has majority.

He said though the government had managed to get the mess concerning allocation of coal blocks cleared with ease, resolving other issues remained a challenge.

Asked which three specific reforms he would like to get passed in the coming winter session of Parliament, Mr. Jaitley said he would like the insurance Bill, coal laws and Goods and Services tax to be cleared. He said there were political risks to reforms..

“Reforms by themselves are not enough, if they have to survive politically, the blending [with politics] has to be adequately done by those involved,” Mr. Jaitley said. — PTI

 

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