[1]In a bid to reverse the downturn in economy and give fillip to the investment, new finance minister P. Chidambaram on Monday unveiled a roadmap to fine-tune existing policies.
In a statement he indicated to put in place a stable and non-adversarial tax regime, a possible cut in interest rates and measures to attract domestic savings and foreign capital.
Reversing the recent policy initiatives, the finance minister has directed a review of tax provisions that have a retrospective effect in order to find a fair and reasonable solution to pending as well as likely disputes between the tax department and assessees concerned. Chidambaram also made an obvious reference to recent controversies over retrospective amendment to the Income Tax Act and GAAR (General Anti Avoidance Rules) provisions in the Budget for 2012-13.
“Clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution and an independent judiciary will provide great assurance to investors. We will take corrective measures wherever necessary,” the statement said, adding that government would work closely with the RBI to moderate inflation in the medium term.
Conceding to the fact that current interest regime is high, the finance minister said, “Sometimes it is necessary to take carefully calibrated risks in order to stimulate investment and to ease the burden on consumers. We will take appropriate steps in this regard.”
Referring to the appointment of two committees to examine GAAR and taxation of IT sector, Chidambaram said, “I have also directed a review of tax provisions that have retrospective effect in order to find fair and reasonable solution to pending as well as likely dispute between the tax department and the assessees concerned.”
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