Retro tax panel for new cases only; pre-Budget meet in Nov

Moneycontrol Bureau

The high-level committee or retro tax panel - which was set up in August to scrutinise all Income-Tax (I-T) cases arising of the retrospective tax amendment - will handle only fresh cases, says revenue secretary Shaktikanta Das.

The government has already sent out a strong message to all investors – domestic as well as international – that retrospective amendments to tax laws will not happen.

Finance minister Arun Jaitley, in his Budget speech, had said that the NDA government will not ordinarily bring about any change retrospectively which has the potential to create fresh liability. "The sovereign right of the government to undertake retrospective legislation is unquestionable. However, this power has to be exercised through extreme caution and judiciousness keeping in mind the impact of each such measure on the economy and the overall investment climate," Jaitley had said in his Budget speech on July 10.

He had also announced the formation of a retro tax panel in his Budget speech.

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The revenue secretary further adds that there is a need to move away from aggressive tax planning and assessments. He says the industry needs to work closely with the government to encourage a non-adversarial tax regime.

"The whole perception of the department being aggressive is centred around 7-8 cases which are in various courts," says Das. He asks the industry to work together with the government keeping these 7-8 high profile cases aside.

Das says the government will soon come out with new threshold for cases referred to Advance Authority for Rulings, besides adding that relevant notifications on transfer pricing is also underway.

The government will begin pre-Budget consultation meetings with the industry from November. Das says the government is seeking industry representations on 10 significant action points that can and will make a difference.