When finance minister P Chidambaram constituted a forum in July under his adviser Parthasarathi Shome to settle tax issues and disputes, sceptics thought it would be just another such initiative to boost industry sentiments for the time being, and will fizzle out in due course.
After three meetings of the forum—it is meeting every Wednesday since August 7—initial reactions of the industry representatives suggest it has succeeded in opening a sustainable window for addressing larger concerns of the industry, which are caught in the revenue department’s tangled web. So, Shome’s darbar has begun well and has raised hopes about quick delivery of solutions to the problems, especially the ones arising out of arbitrary interpretation of tax provisions at the ground level.
The ground rules of Shome’s darbar are meticulous, organised and simple: It will not take up individual disputes and handle only industry issues; request for exemptions, tax-rate cuts will not be entertained, no wish-list, too; only those disputes would be taken up in which clarifications from the tax departments are required. The industry bodies are required to first fill in a format provided by the forum’s chamber outlining the issues to be tackled, their point of view, and past history among other information.
To name a few critical issues, which have already been discussed—the forum has assured clarifications on the taxation of ‘key man’ insurance, input credit of service tax paid on reinsurance, taxation of securitisation trust, and applicability of norms for imposing service tax in new areas. All these issues are the ones impacting a large gamut of companies. What the forum does is first hear out the views of the corporates on a particular issue and then the stand of the revenue department officials on it. After the exchange of views, a decision is taken on the steps required to address industry concerns.
After identifying a particular sector and the issues, Shome then calls the industry representatives for deliberation with senior tax officials, handling policy issues in the Central Board of Direct taxes (CBDT) and the Central Board of Excise and Customs (CBEC), at the meetings.
According to the industry representatives who