CBDT warns tax avoidance era over for cos, moots stern action
“Tax is in the boardrooms. Tax is no longer in the offices of the CFOs, because your brand will suffer if you get a stigma of being a tax avoider
Taking a stern stance against companies indulging in tax avoidance, Central Board of Direct Taxes Chairperson Anita Kapur said such action in the garb of minimising tax burden was over.
"The era of tax avoidance, am not talking of evasion, in the garb of minimising taxes is over. You have to pay the government based on the intent where actually the business happened; there you should be paying the taxes. People who are still bent upon organising their businesses in a manner to avoid taxes will be "outliers", she said at an event on taxation organised by the Confederation of Indian Industry here.
"Tax is in the boardrooms. Tax is no longer in the offices of the CFOs, because your brand will suffer if you get a stigma of being a tax avoider," Kapur said.
She said the department must deal sternly with tax evasion and avoidance. Highlighting the importance of recently released taxation norms of Base Erosion and Profit Shifting, Kapur said, India is no longer be a "minority voice" in the global arena for ensuring tax compliance.
"In India, when tax administration used to say please pay your taxes because you have added value in India, we were a minority voice. With BEPS project, our concerns have been heard and we are no longer the minority voice," she said.
The Base Erosion and Profit Shifting project of the Organisation for Economic Cooperation and Development and G20 includes measures to ensure taxation in a number of instances where income would otherwise go untaxed. Some measures, such as the revised guidance on transfer pricing, may be immediately applicable, while others need changes to bilateral tax treaties.
Citing a recent study carried out by National Institute of Public Finance and Policy, Kapur said, there are large taxpayers in the sys-Cogencis tem but they are understat-Cogencis ing their income.