1) the law should be interpreted by supreme court not mr bhusan
2) In future, the govt should make taxation simple and low, with no EXEMPTION.
3) Get rid of the DTT with puny countries.
Finanace ministry in its wisdom frames so many rules with loop holes in the name of "encouraging FDI". If you want to purchase shares, you will have to give so many information like your PAN card, your source for purchase and what not. But take the alternate participatory notes. No one knows who is this purchaser. It was a clandestine way divined by our wonderful finance ministry to aid our black money holders and MPs to route their ill gotten wealth to india with out any check and convert everything into legal by later sales. There is collusin between the finance minister and his slvish ministry ready to black out anything, create ante dated orders and in short anything. This reminds me of TB Macualay's write up about the stage of his days.
"in order to enthuse and encourage the audience, the actresses "showed a little". Excited audience called for "more show up". Actressses showed more.Audience called for "still more". Thus ACtresses spoiled the audience and the audience spoiled the actresses".The position is nothing more than that in our taxation laws for encouraging FDI.
Asim Ghosh put togather a Hong Kong tycoon, a member of the Ranbaxy Singh family & created Hucthision Max. It went on transform in to Hutchsion Essar, possibly when Ruias bought in to the largest Indian stake . At that point these investments possibly could not even be termed treasury operations . Rich men do put some money in some obscure enterprise on the basis of personal aproach. Because if I am not wide off the mark, all this happened when mobile telephony was just a curiosity within a few with those two way radiosets weighing half a kilogram having antennas like elephant trunks & talking with their help would cost you nfortune of `14 a minute , chargeable both ways. 52% of this entity was transferred to Vodafone which eventually fetched $18 billion. All this happened in & within the shores of India, except it looks possibly paper work for the last event was consummated in one of those esoteric tax heavens.
If this is not capital gains , legally illiterates like me would not understand how capital gains. Possibly I will have to become - no way -a Supreme Court judge understand capital gains.
One is unable to understand how the Supreme Court verdict in the Vodafone case is regarded as good for FDI coming to India. If such FDI is actually depriving us of our revenue, it is a curse, not a blessing. While some lawyers and tax experts may welcome the verdict in the Vodafone case, as an independent sovereign nation we need to be very pragmatic and rational in our response to the Supreme Court verdict. Our legal experts must examine the practice of taxing such transactions in similar situations in other countries. If necessary, an immediate amendment in our related tax law can be made in the Budget session of Parliament. This would restrain companies from avoiding taxation and also make redundant the unnecessary litigation. Our officials in the Central Board of Direct Taxes have to be far more alert. They should also examine the Mauritius tax treaty as well to ensure that such treaties are not used to escape tax net.
A tax liability of Rs. 11,000 crores must be based on the letter of the law, not on patriotic fervour. The Vodafone judgment follows the law of the land.
Even in Income Tax, the Indian Govt policy is to "keep kicking honest tax payers". In NE India, tribals do not have to pay Income TAX in their home state. So NAGAs in Nagaland, MIZOs in Mizoram, Khasis in Meghalaya, Manipuris in Manipur, Tripuras in Tripura etc etc including Govt officials do not pay INCOME TAX. Why no such rule exist for UP, BIHAR, MP JHARKHAND, CHATTISGARH tribals who are more backward than tribals of NE??? This rule is being mis-used by showing that Income is generated by such NE Tribals, 10% of income is paid to NE tribal and balance 90% taken out as Black Money without paying Income Tax. All TAX EXEMPTIONS should be done away.
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