{"id":969,"date":"2012-03-21T08:38:40","date_gmt":"2012-03-21T08:38:40","guid":{"rendered":"http:\/\/www.itatonline.org\/articles_new\/?p=969"},"modified":"2012-03-22T18:35:29","modified_gmt":"2012-03-22T18:35:29","slug":"dont-let-vodafone-get-away-without-paying-taxes-cbdt-ex-chief","status":"publish","type":"post","link":"https:\/\/itatonline.org\/articles_new\/dont-let-vodafone-get-away-without-paying-taxes-cbdt-ex-chief\/","title":{"rendered":"Don’t Let Vodafone Get Away Without Paying Taxes: CBDT ex-Chief"},"content":{"rendered":"
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\"Shri.<\/div>\n

Don’t Let Vodafone Get Away Without Paying Taxes: CBDT ex-Chief<\/p>\n

Editorial Board<\/p>\n

Shri. Sudhir Chandra, former Chairman of the CBDT, sends out a powerful emotive appeal that letting MNCs like Vodafone escape without paying tax on the trillions of dollars that they earned from India will wreck the Indian economy and spell havoc for the common man. He rues the misconception because of which the common man treats the tax evaders as heros and the tax department as villans\n<\/p><\/div>\n

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Mr. Sudhir Chandra, CBDT\u2019s ex-Chairman has come out with all guns blazing in support of the retrospective amendments in the Finance Bill 2012 seeking to nullify the judgement of the Supreme Court in Vodafone International vs. UOI<\/a><\/strong> 341 ITR 1. In a hard-hitting and no-holds barred article in the Business Standard<\/a>, Sudhir Chandra attacked tax consultants who think it is their right to create paper SPVs in tax havens to avoid Indian capital gains and when their right to avoid tax is challenged, they shout or grumble.\n<\/p>\n

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while some people scream from the rooftops that India does not have adequate infrastructure and needs to invest trillions of rupees to create it, they seem to think that it is not their responsibility to pay tax and that the government should somehow find the money to create infrastructure without building up a deficit<\/p><\/div>\n

The CBDT ex-Chief made it clear that there was no ambiguity or uncertainty in the law that if one earned income because of his business in India, he had to pay income tax in India.\n<\/p>\n

Sudhir Chandra rued that while some people scream from the rooftops that India does not have adequate infrastructure and needs to invest trillions of rupees to create it, they seem to think that it is not their responsibility to pay tax and that the government should somehow find the money to create infrastructure without building up a deficit. He cautioned that if everyone were allowed to escape tax, governance will collapse as it did in Greece and if that happened, then the consultants, bankers and foreign institutional investors would move on to greener pastures leaving India behind.\n<\/p>\n

Sudhir Chandra described Vodafone as a \u201cclassically right case for lifting the \u201ccorporate veil<\/em>\u201d, ignoring tax haven companies and levying full tax because it (i.e. the transferor) had earned trillions from Indian assets and sought to avoid the entire liability on the basis of a tax haven SPV.\n<\/p>\n

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the misconception in the minds of the common man who considered tax consultants who helped MNC\u2019s get away without paying any tax as heroes and the tax commissioners who try to stop them as villains .. the common man ignored the fact that every time someone walks away without paying billions of rupees of tax, the tax burden has to be picked up by the poor and middle class<\/p>\n<\/div>\n

Sudhir Chandra also rued the misconception in the minds of the common man who considered tax consultants who helped MNC\u2019s get away without paying any tax as heroes and the tax commissioners who try to stop them as villains. He pointed out that the common man ignored the fact that every time someone walks away without paying billions of rupees of tax, the tax burden has to be picked up by the poor and middle class.\n<\/p>\n

As an example of the department\u2019s fair stance in cases of genuine global mergers, Sudhir Chandra cited the example of Unilever which globally acquired the holding companies Brooke Bond and Lipton. Though the ownership of Brook Bond India and Lipton India changed hands, the Indian income tax authorities did not raise a murmur or contemplate \u201clifting the corporate veil<\/em>\u201d because it was a genuine global merger<\/em>.\n<\/p>\n

Sudhir Chandra was candid that retrospective amendments were, in general, unjust and inequitable. However, this was a rare case he said and added that Parliament had no choice but to amend the law with retrospective effect. He said this was a \u201cstep in the right direction<\/em>\u201d and that a \u201cclear message was sent that anyone who wants to do business in India but does not want to pay tax in India is not welcome<\/em>\u201d.\n<\/p>\n

At the same time, Sudhir Chandra struck a voice of reason when he said that powerful people (i.e. the tax department) should have the grace to pardon the offender and not impose penalty after having collected the tax (\u201ckshama virasya bhushanam<\/em>“).\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Shri. Sudhir Chandra, former Chairman of the CBDT, sends out a powerful emotive appeal that letting MNCs like Vodafone escape without paying tax on the trillions of dollars that they earned from India will wreck the Indian economy and spell havoc for the common man. He rues the misconception because of which the common man treats the tax evaders as heros and the tax department as villans<\/p>\n

Read more ›<\/a><\/div>\n

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