The Central Board of Direct Taxes (CBDT) is fighting many battles all at once — from the Vodafone tax case to pacifying India Inc on certain provisions of the direct taxes code, to voicing concerns on a hurried shift to IFRS. Haste makes waste. That’s the message from CBDT Chairman SSN Moorthy, who believes that convergence to IFRS by April 2011 may be cutting it too fine. He says India Inc is not fully prepared, and needs more time.
CBDT fighting many fires: Chairman
SSN Moorthy said, “As far as IFRS is concerned, personally, I am of the opinion that there should be some more time factor for implementation. I don’t think the Indian companies are ready for implementation, but the institute has its own compulsions because of the standards imposed by international bodies. So they have selected a few high ranking companies who may implement that.”
The time factor is not his only concern. Moorthy added that after implementation; a lot of work will have to be done to make the practice complement the direct taxes code.
His warning on IFRS aside, Moorthy’s department is also busy fighting fires on the DTC front. Several companies have raised concerns that general anti avoidance rules under the proposed direct taxes code could be used by it officials to deny treaty benefits while examining agreements or transactions. Here’s how he allays these fears.
“We will be making sub-ordinate legislation that is rules for implementation of GAAR whereby we will be moderating powers of assessing officers. There will be a high powered body of some senior officials who will look into GAAR operations and see that it is applied in a moderate , assesse friendly fashion,” added Moorthy.
But even as CBDT moves to provide India Inc with smooth transitions to both IFRS and DTC, it is not willing to back down from its biggest ongoing fight — the legal battle against Vodafone for a tax claim of Rs 11,218 crore.