Comments
India will, in the next three months, settle tax disputes involving 120 US companies, Revenue Secretary Shaktikanta Das has said.
This will be done under the new framework agreement on Mutual Agreement Procedure (MAP) entered into with the US recently, Das said at an international tax conference organised by PHD Chamber of Commerce and Industry (PDCCI) recently.
Describing the framework agreement as historic, Das said it could pave the way for India to enter into similar agreements with other countries. “When India could enter into such a framework agreement with a mighty power like the US, there is no reason why similar agreements cannot be arrived at with other developed countries also”.
Stating that the focus of international taxation should be on dispute resolution, Das said the government was moving fast on this front.
Sharing information “We are moving fast. Our focus now is to resolve as many disputes as possible. In fact, we want the companies in dispute to reciprocate and share information quickly with us. This request has been conveyed to the US authorities, who have, in turn, asked their companies to furnish the necessary information promptly,” he added.
Besides MAP, the Indian authorities are also entering into advance pricing agreements (APAs) with several US-based companies with business connections in India.
Entering into APAs is expected to help reduce litigation on the transfer pricing front. So far, India has entered into about 16 APAs, mostly unilateral, including some bilateral ones. Das highlighted that international taxation had become relevant for India as the economy is now more open than it was three decades ago.
“International tax is now challenging for governments as well as practitioners and experts. The first priority of every country is to protect its taxation turf and there is nothing wrong about it,” he said.
Das also reiterated the government’s stance that arbitration was not the best method to resolve tax disputes.
Transfer pricing has been the bone of contention in most tax disputes faced by foreign companies operating in India.
On the US-enacted Foreign Account Tax Compliance Act, the Revenue Secretary said the Indian government was in a position to share necessary information with effect from September 30.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.