Tax laws

There is a general tendency to look for loopholes in tax laws: Secretary of Finance

There is a general tendency to look for loopholes in tax laws: Secretary of Finance

Bangalore, 07 Mar (UNI) Noting that industry has a role to play in reducing tax disputes in the country, Union Finance Secretary TV Somanathan said on Monday that there is a general trend in the country to leave no loophole unexplored in the law to evade taxes. . He said government and industry need to change their attitude to reduce conflict. “In terms of tax disputes in general, I would say I think the industry also has a role to play in terms of reducing tax disputes. I think there’s a trend in this country of not letting any unexplored loophole. It’s kind of a philosophy that he’s approached with by the accounting profession and that advice comes at a high cost to the industry. The industry buys the advice,” Somanathan said in a post interaction. -budgetary with industry He pointed out that in one of the famous cases of so-called retrospective taxation (which was abandoned) the advice to the company was that this is the strategy which may or may not work work, but that it has to be tried.”…and it’s the one that has caused a lot of people a lot of heartache. So I think I would just appeal (that) while there’s a lot of real problems and a lot of things that the government needs to fix, obviously I’m not denying that in any way, but there’s also cases where the industry is looking for very deep flaws on a very speculative interpretation and saying let’s try this because if we win it will be good,” he said. The finance secretary said changes in attitude were needed on both sides, government and industry. Revenue Secretary Tarun Bajaj agreed with his colleague’s view and cited the recent case of some companies insisting that disposals should be considered an expense. “Recently, some companies have obtained a favorable ruling from some high courts that the tax is an expense, while the Supreme Court has also ruled that the tax and surcharges are income tax and obviously are not not an expense So what happened is that once that decision was made we found that in all of the ongoing litigation the lawyers in every court took an extra point saying that the assignment is an expense and not an after-profit-before-tax (PBT) item,” Bajaj said. The Revenue Secretary suggested that as the government plugs one loophole, the industry finds another and continues to make the law complex in the process.” I make a lock on my door, there is a key that opens it. Then I do another lock, and I create so many complexities in the law just to close that loophole,” he told UNI NK