Jaitley rules out tax amnesty schemes; vows re-look at GAAR
31 Jul 2014
The government on Wednesday ruled out any tax amnesty scheme to unearth black money, saying these are unfair to honest taxpayers; but finance minister Arun Jaitley yet again promised a re-look at the controversial General Anti-Avoidance Rules (GAAR), which have irritated foreign investors.
On the demands of some states like West Bengal, Bihar, Odisha and Punjab for special packages, Jaitley said the government will decide on the specific demands of the debt-ridden states after receiving the report of the Finance Commission, which is expected by the year-end.
He was speaking in the Rajya Sabha while winding up the debate on the Finance Bill, which was later returned by the Upper House, marking the completion of the budgetary process for 2014-15.
Minister of State for Finance Nirmala Sitharaman, while responding to specific issues raised by members, made it clear that the government has no intention to give amnesty to tax evaders to unearth black money.
"The experience shows when you bring in VDIS (Voluntary Disclosure of Income Scheme), it discriminates against genuine tax payers. Those of you who pay taxes are dis-incentivised... it goes against honest tax payers... It may be may not be a conducive path for recovering more taxes," she said.
Referring to the tax proposals announced in the Budget, Sitharaman said attempts have been made to provide relief to small and medium tax payers to encourage savings and promote growth despite the limited fiscal space.
Later responding to queries on implementation of the controversial General Anti-Avoidance Rules (GAAR), Mr Jaitley said, "After the budget process is over, we will look into it whether it is that date or some other date and whether some amendments are required or not and only then we will be able to make a final call on that."
GAAR, which aims to minimise tax avoidance for investments made by entities based in tax havens, is to come into from April 1, 2015, after being postponed once.
Announced by the previous UPA government in 2012-13 Budget, GAAR had created nervousness among investors.
