India's Finance Minister Arun Jaitley said the government would press ahead with Rs 400 billion tax demand on foreign institutional investors (FIIs) as they lost a case against levy of tax on capital gains they made.“FIIs went to a tribunal, which is called Authority for Advance Rulings (against levy of 20% Minimum Alternate Tax on capital gains). The tribunal has decided against them. I can change the face of India's irrigation with that Rs 400 billion,” he said.
The BJP government, Jaitley said, has abolished MAT from April 1, 2015, but the demands pertain to tax related to earlier period and they wanted it to be waived. “To which I responded and said `we are reasonable, so for the future I have waived it. But, the tax demand after winning the case, if I waive off, we will be like a tax haven ....how would be I answerable to Parliament that after the case I just waived Rs 400 billion.”
On multi-billion dollar tax demands on Cairn Energy of UK and Cairn India, Jaitley said the tax assessment orders were passed in January 2014 and demands were follow-up related notices. “Since they are entitled to challenge (notices) in court, we will see what the courts decide.”
Talking about the initiatives taken by the new government, Jaitley said in the last one year no retrospective tax law has been brought and “not a single new notice has been issued. My only problem is with regards to legacy issues that I inherited from the previous government.” Jaitley also expressed hope that the bill for introduction of Goods and Services Tax (GST) will be passed in the coming session of Parliament. He sounded confident that the new indirect tax regime would be put in place from April 1, 2016. Jaitley said the GST will be the “single biggest” tax reform since independence.
.
