Government’s appeal against Vodafone admitted in Singapore court

Central Board of Direct Taxes (CBDT) chairman P C Mody on Tuesday confirmed that the government has moved Singapore court against an arbitration tribunal’s award in the Vodafone case, which has now been admitted for hearing. The Centre is also examining the Cairn order related to retrospective amendment of tax laws.

“The law as it stands, there was a case to appeal against the award. How can the arbitration award be contrary to the law that is there? It is their interpretation and we believe there is a case against appeal… Can a bilateral treaty take away the taxation rights of a jurisdiction? That is the larger question,” CBDT chief told TOI.

In a post-Budget interview, Mody sought to defend the government decision to levy tax on provident and ULIP contributions beyond a threshold on the ground that only a “select few” will be affected. “The idea is to bring in greater equity. The tax structure should be simple. External interventions such as promoting savings or something else can be done more efficiently through other instruments. Why should tax be the instrument? It makes things more complicated. The idea is to leave the money with the taxpayer as he is the best judge, whether he wants to spend or invest, or decide whatever is the best instrument for him.”

He appeared optimistic about meeting the direct tax collection target, arguing that an improvement in economic activity as well as a revamp of the tax administrationwill help.

“There is a paradigm shift in the processes and the manner which the tax administration is geared. From a territorial jurisdiction, we have moved to dynamic jurisdiction. We have moved to consistency, objectivity, some sort of uniformity. This is an absolute game changer. Endto-end is faceless. The overall experience that the taxpayer is getting that he can go about his economic activity without bothering about tax.”

Besides, he said the recent initiatives on data sharing with the indirect tax wing as well as with other agencies such as Sebi and the ministry of corporate affairs are helping keep tabs. ToI