On May 6, 46 countries, including India and Switzerland, adopted a declaration on automatic exchange of information on tax matters, which recognises that investments kept offshore by tax payers should not go untaxed, Chidambaram said in a statement.
The declaration refers to the Multilateral Convention, which is signed by more than 60 nations, including Switzerland, which reportedly is yet to ratify it. I believe that the day is not far off when all major financial centres will be parties to an effective exchange of information on automatic basis, Chidamabaram said.
India has been pressing Switzerland to share details about the secret bank accounts some Indians have in a Swiss bank, but the European nation has not been able to oblige due to its domestic legal provisions.
In a separate statement, the minister said that British Telecom giant Vodafone initiated arbitration against the Indian government on a tax dispute regarding its 2007 purchase of Hutchison Essar without waiting for the Income Tax appellate tribunal decision on another dispute that was seen as a hurdle to engaging in conciliation talks.
The minister clarified that the revenue department had on March 11 requested Vodafone to engage seriously in the proceedings before the Income Tax appellate tribunal.
The Cabinet had on February 28 decided to keep the door open for conciliation with Vodafone in the bitterly contested Rs 20,000 crore tax dispute on its Hutchison Essar deal, leaving a transfer pricing dispute that obstructed conciliation talks, to be decided by the tax tribunal.
Chidambaram said the revenue department had assured that it would ensure the appeal would be heard early. Vodafone, however, informed the department on March 13 that it saw no merit in reviewing the matter of conciliation on receipt of the decision of the ITAT. Vodafone informed that the only body capable of resolving the issue would be an arbitration panel constituted according to the India-Netherlands Bilateral Investment Promotion and Protection Agreement (BIPA).
The government then decided to move the Cabinet for approval for withdrawing the conciliation offer. Meanwhile, without waiting for the outcome of the ITAT proceedings, Vodafone served a notice of arbitration dated April 17, the statement said.