Reading PoEM wrong
I would request you to kindly refer to the article by Mr. Jaithirth Rao titled “We need PoEM like we need a bullet in the head”, published in The
Financial Express on 5th January, 2016. Apart from making some very sharp, uncharitable remarks about the PoEM and about the Indian bureaucracy, the article is based on hearsay rather than the draft PoEM guidelines issued recently in public domain. We wish the author could go through the draft principles before making sweeping remarks. For example, the article says that a company will have to stop occasional meetings in India in order to come under PoEM. Nothing could be farther from truth. The draft principles clearly provide that a company engaged in active business outside India and which has majority of the Board of Directors outside India will not be construed to have a PoEM in India. Having an occasional Board in India or setting up of regional and divisional offices in India does not make company a resident of India, as has been clearly pointed out in the draft principles.
Also, the concept of PoEM is an internationally recognised test for determination of residence of a company and is part of tax code of various countries and is included in the OECD and UN Model Tax Conventions. The concept is also recognised in most of the tax treaties entered into by India. The guiding principles have been drafted to standardise determination of PoEM so that subjective and discretionary approach is avoided.
Besides, the observation of the author that income tax has nothing to do with round-tripping is surprising.
Revenue Secretary, GoI
BCCI reforms crucial
This is in reference to the edit “BCCI 2.0” (FE, January 6). The Supreme Court-appointed committee headed by former Chief Justice of India Justice M R Lodha has recommended far-reaching and drastic changes in the cricket administration of the country. The Justice Lodha committee’s recommendations regarding fixing the tenure of office bearers, setting up age limit for contesting election, prohibiting ministers and government officials from becoming Board of Control for Cricket in India (BCCI) office-bearers, allowing only one association in a state (no city-based association), bringing BCCI under the ambit of Right to Information Act, forbidding members to hold dual positions in BCCI and state associations, reducing the number of office-bearers, greater role for players in the conduct of cricket in the country, appointment of ombudsman for settling internal disputes, transparent election procedure under the supervision of a former election commissioner are laudable. Similar reforms are required in other sports bodies also as, in some of them, politicians have been holding posts for decades, as if they are doing exemplary work. Such situation has forced the people to believe that India is perhaps the only country where inefficiency, lethargy, incompetence and non-performance are rewarded.