In a discussion with the new Finance Minister Arun Jaitley, FICCI inter-alia suggested supplementing the remarkable flurry of actions by the new Leadership, with positive articulation in the policy space in the run up to the Budget. This will curtail conjecture while laying foundations for delivery. "To support the forward looking development and delivery oriented agenda of the new government, a non-adversarial, conducive and fair tax regulatory environment is the need of the hour. We must show that India values and welcomes capital,and supports it byclear and credible policies.Enterprise and administration must both stand assured that decisions and actions in good faith will be respected and protected", said Mr. Sidharth Birla, President, FICCI.
Mr. Birla said,"The Government could ideally declare as policy that retrospective action shall not be resorted to, save in rarest of cases, but never for creating a fresh onus or liability for a previous period. In fairness, retrospective change if needed must invariably favour the taxpayer."
Also citing concerns related to taxation of capital, Mr. Birla stated, "Provisions which effectively deem portions of capital to be in the nature of income are serious deterrents to genuine transactions, while keeping the door open for aberrant behaviour. Fishing expeditions harm business atmosphere and reputations. Rapid disposal of cases and enquiries is essential,unless there is clear evidence of wrongdoing."
Other key suggestions made by FICCI implementation of a comprehensive Goods and Services Tax (GST) in 2015. Changes can be examined in laws to aggressively widen tax base, simplify laws, rationalize xemptions, conducive tax environment with litigation moderated and only as exception. Review relevance of a Direct Tax Code (DTC); most changes already incorporated in law. Review GAAR; freedom from CFC-coverage to legal Indian holdings and structures abroad. Possible steps on illegal assets abroad through tax net. Rebated income tax periods for small start-up businesses, in essence individually owned.