Foreign investors have been vocal in their criticism of the recent Rs 40,000 crore tax demand on FIIs, but Indian companies feel there is nothing wrong, and the investors should not hesitate to pay up the dues.
The new president of Indian industry body CII (Confederation of Indian Industry) Sumit Mazumder, who took charge last week, told HT that the recent statement by finance minister Arun Jaitley that India is not a tax haven, while being non-adversarial in tax policies, are steps in the right direction.
“The government cannot be giving tax exemptions for each and everything. If the demand is genuine then no tax payer or investor should be against it,” said Mazumder, who is the chairman and managing director of TIL.
The comments came after recent MAT notices to foreign investors faced criticism.
About 100 foreign funds reportedly got notices to pay taxes over the past years. This has spooked investors though the government maintained that the notices were for taxes not paid till March 2015.
The Income Tax department imposed 20% Minimum Alternate Tax (MAT) on capital gains made by FIIs.
Finance minister Arun Jaitley in the budget for 2015-16 has proposed to scrap MAT on capital gains made by FIIs. Revenue secretary Shaktikanta Das had said that FIIs were asking for “retrospective exemption” of MAT.
Mazumder also said the current flagship programme of ‘Make In India’ is “master stroke by Prime Minister Modi which will address the three key challenges of the economy — poverty, unemployment and would spur growth in one go.”
Besides CII will also soon submit a plan to revive the infrastructure sector which has been an impediment in the economic growth in the last few years.
“Various sectors in infrastructure are faced by troubles caused due to delays in regulatory clearances which have marred the infrastructure companies to an extent that it reflects in their stressed balance sheets,” he said.
“Now this situation of the industry is caused by the government. And given that it is the private sector that will build infrastructure in the future, the government needs to hand hold the sector in a manner that the lending gets back to these companies. Finance minister Jaitley has asked me to submit a detail workable plan which takes care of the concerns of the government policies and at the same time cater to the needs and requirements of the industry. I will soon submit a plan.”