Raja may get hearing on 2G from PAC

New Delhi:Denied a hearing by the Joint Parliamentary Committee (JPC) on telecom, DMK leader A Raja might get a chance to tell his version of the 2G story before the Public Accounts Committee (PAC).

The PAC’s 2G report remains an “unfinished agenda” as it was not formally adopted after Congress members protested its conclusions blaming PM Manmohan Singh and finance minister P Chidambaram for lack of oversight.

The recent controversy over Raja being indicted by the JPC without being allowed to present his views has brought the PAC’s older report in focus. TNN

PAC on 2G: DMK’s exit may make things difficult for UPA
New Delhi: The DMK’s exit from the ruling coalition has also tilted the balance slightly away from the UPA in the PAC and a new sense of opposition unity can propel the 2G report back onto the committee’s active agenda.

The report did not get an official tag after a PAC meeting was adjourned without a ruling from senior BJP leader M M Joshi who heads the committee. Joshi thereafter sent the report to Lok Sabha Speaker Meira Kumar.

The Congress and its allies had then demanded a vote on the report’s adoption, a move that came back to haunt the ruling party in the JPC where half the members have threatened to “reject” the official draft’s clean chit to PM Manmohan Singh and finance minister P Chidambaram. Sources said the 2G report has not been brought back for the PAC’s consideration given the tempers it has raised in the past, but it was up to the panel to decide whether it needs to hear more witnesses to add to the report.

Joshi had been keen that the committee examine T K A Nair, former principal secretary to the PM (currently secretary in PMO), former cabinet secretary K M Chandrasekhar and A Raja. The BJP leader had argued that the PMO and the cabinet secretariat could respond to Raja’s claims that he had not acted in isolation and kept the PM and Chidambaram informed about both policy and allocation procedures.

Clashes in PAC meetings ensured that none of the three were able to brief the committee, but the Congress’s opposition to the draft ensured it could be brought back to life from the suspended animation it has been in.

Whether the committee does get around to calling Raja is a contentious issue, as such a move is bound to reignite the acrimony that marked proceedings when the 2G report was being considered. However, this time, the DMK has switched sides over Raja being denied a hearing by the JPC.
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Shell India Tax demands likely to hit sentiment

MNCs, Individual Taxpayers Get Notices Despite Disputes Being Settled
New Delhi: A spate of high profile tax demands on several multinational companies (MNCs) such as Shell, Nokia and Vodafone has the potential to hurt sentiment and experts said investors are hoping that the Budget will have some steps to ensure fair dispute resolution. It is not only companies which are being targeted, even individual taxpayers have come under the taxman’s scrutiny. Several taxpayers have been served notices despite disputes being settled. The tax department, which is facing slowing revenues, has unleashed several demands in the past few weeks, attracting strong criticism and the firms have vowed to challenge the notices.

Experts said the government’s efforts to assure investors have taken a knock with these notices and firms are anxious about fresh developments. “The fact is that revenue collection pressure gets translated down to officers. The high pitch assessment has reached a level of absurdity,” said Gokul Chaudhri, partner with tax consultancy firm BMR Advisers. “The question is how do you bring back investor confidence in this environment? There is uncertainty in the mind of the investor community,” Chaudhri said, adding that all eyes are on the Budget to see whether finance minister P Chidambaram reassures investors and announces an action plan for dispute resolution.

Chidambaram has taken several measures to assure investors about the stability of India’s tax policies after the impact of some tax proposals in 2012-13 scared investors to the sidelines. The government has deferred implementation of the controversial General Anti Avoidance Rules (GAAR) to 2016 and vowed to provide a non-adversarial tax environment.

“At a conceptual level things are looking positive with the government deferring GAAR and accepting recommendations of the Rangachary committee. However, there seems to be a disparity between the policy level and the ground level reality,” said Dinesh Kanabar, deputy CEO of consulting firm KPMG. He said a part of the problem lies in the stiff targets set for revenue officials which translated to such steep tax demands. “The need is to expand the tax base,” Kanabar said.

Telecom giant Vodafone and Shell India have said they will challenge the tax notices, while Finnish telecom giant Nokia has said actions of the tax authorities were “unacceptable and inconsistent with Indian standards of fair play and governance”. “Shell India’s considered view is that the transfer pricing order is based on an incorrect interpretation of the Indian tax regulations and is bad in law as this is a capital receipt on which income tax cannot be levied. Funding of a subsidiary through issue of shares is common in India and globally,” Shell India chairman Yasmine Hilton has said.

“Taxing the money received by Shell India is in effect a tax on FDI, which is contrary not only to law but also to the spirit of the recent global trip by the finance minister to attract further FDI into India,” Hilton has said. Slowing economic growth has put pressure on revenues and authorities are struggling to keep the fiscal deficit within the targeted 5.3% of gross domestic product. Revenue officials are under pressure to meet the tax targets set for the year.

FUELLING CONTROVERSY
The tax department, which is under pressure to meet targets set for the year, has unleashed several demands in the past few weeks, attracting strong criticism

While Vodafone and Shell India plan to challenge the tax notices, Nokia has said actions of the tax authorities were “unacceptable and inconsistent with Indian standards of fair play and governance”

“There seems to be a disparity between the policy level and the ground level reality,” said Dinesh Kanabar, deputy CEO of consulting firm KPMG, adding that a part of the problem lies in the stiff targets set for revenue officials which translated to such steep tax demands
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