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PwC

OECD – IFA Tax Conference. India Tax Dispute Resolution Avenues January 2008. Dinesh Kanabar, Executive Director, PwC. PwC. Snapshot. Traditional Avenues Non-traditional Avenues Structural deficiencies Concluding Remarks. Traditional Avenues. Supreme Court. 3 to 8 years.

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PwC

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  1. OECD – IFA Tax Conference India Tax Dispute Resolution Avenues January 2008 Dinesh Kanabar, Executive Director, PwC PwC

  2. Snapshot • Traditional Avenues • Non-traditional Avenues • Structural deficiencies • Concluding Remarks

  3. Traditional Avenues Supreme Court 3 to 8 years • Most tax disputes are dealt with under the traditional dispute resolution avenues • Substantial period of time taken at each level of dispute resolution forum • At times, pro-tax revenue approach perceived at lower levels High Court / National Tax Tribunal 2 to 5 years Tribunal 1 to 3 years Commissioner (Appeals) 1 to 2 years Tax Officer 0.5 to 2 years Biggest drawback – It could take upto 15 – 20 years to achieve certainty in tax position !!

  4. Non-traditional Avenues Supreme Court / High Court (special leave petition or writ petition) Authority for Advance Rulings Competent Authority Proceedings Settlement Commission • Division of CBDT for handling MAP matters • Only few cases of MAP handled by the FTD till date • Competent authorities of two countries could agree to disagree • Uncertain time-frame: could take couple of years • Deals with settlement of cases where there is substantial complexity & protracted litigation • Only cases pending before tax officer in a tax assessment can be settled • Generally takes 10 to 12 months • facility available only to non-residents & public sector companies • Ruling binding only on the applicant and tax office • Adjudication only on the specific transaction or proposed transaction • Generally takes 6 to 12 months • SLP / writ option available only in extraordinary cases • Generally, this option is exercisable where there is no alternate remedy available • Option could possibly be used in case of gross injustice in any tax proceedings • Time-frame - ?? Non-traditional avenues not very successful

  5. Structural deficiencies • Tax uncertainty coupled with substantial period in litigation process • At times, aggressive approach of the Tax Office & Tax Payers • Huge number of pending cases before the various dispute resolution forums • For instance, the number of cases pending before the Tribunal as on November 1, 2007 is 78,374 • Aggressive approach in tax collections & tedious tax refund process dents tax payers confidence • Conflicting decisions at various levels of dispute resolution forums adds to the complexity of the Indian tax laws Need for simplification in tax laws & tax administration

  6. Concluding Remarks • Need for focused benches • Recent example of international tax bench of the Tribunal • Need for a settlement process • Can a taxpayer appeal to a Committee of Commissioners before an addition is made by the Tax Officer? • Need for the Tax Office to accept decisions of Commissioner (Appeals) & higher appellate authorities • To avoid unnecessary litigation

  7. Thank You pwc

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