The Swiss authorities have told FE that they have gone through all internal processes to enable India to seek information on Indians holding money in Swiss banks. However, the finance ministry is still maintaining that the Swiss authorities are yet to complete their internal formalities. This raises doubts over how serious New Delhi is about gathering information on black money stashed away in Swiss banks. According to Switzerland’s federal department of finance (FDF), the counterpart of India?s Union finance ministry, the Swiss parliament completed all formalities for the all-important revision of the tax treaty with India for this information flow as early as June 17. The ball, it says, is now in India?s court.

The statement by FDF spokesperson in response to an FE query runs counter to the claim of the Indian government that it was still expecting Switzerland to complete its ?internal process? before the treaty can be revised. The treaty revision will enable New Delhi to source information on specific transactions between Indians and Swiss banks made since the start of this fiscal.

?The Swiss parliament has ratified the (revised) DTAA with India on June 17. We don?t know what (India) has decided since… As soon as both parliaments have ratified (the DTAA), both governments will exchange notes, …will communicate (and) the DTAA will come into force,? said FDF spokesperson Roland Meier.

When FE referred to finance minister Pranab Mukherjee?s recent statement that the revised double taxation avoidance agreement (DTAA) would come into force ?as soon as Switzerland completed its internal process?, and pressed for clarification, Meier reiterated: ?I think I have answered (your query) clearly. On behalf of the Swiss parliament, all is done, as soon as India is ready, the procedure can go on.?

The two countries are re-negotiating the DTAA because the extant pact does not support sharing of banking and tax-related information. The government of India says it is pushing for the change to get information on billions of dollars of black money allegedly stashed away in Swiss banks by Indian citizens. The new framework will permit sharing of information by Switzerland in specific cases for the period starting April 1.

The black money stashed away in Switzerland and other tax havens has become a cause for concern for the government after it came under attack from the Opposition on the issue and faced criticism from the Supreme Court and even the civil society.

According to Swiss National Bank data, the total ?liabilities? of Swiss banks towards Indians were about Rs 9,295 crore as on December 31, 2010. However, independent estimates, including one by a BJP task force in 2009 and another by Global Financial Integrity, had put the Indian black money stashed away in Swiss banks at hundreds of billions of dollars.

India and Switzerland in August last year signed a protocol amending the DTAA, and in June this year, the Swiss parliament ratified the treaty.

Meanwhile, Switzerland has also said it is ready to discuss a formula with India to tax deposits of Indians kept in Swiss banks. It said it was open to discussions whether similar arrangements being mulled for the UK and Germany can be replicated for India. India, however, doesn’t seem to be quite keen on this idea.

In July this year, India received a list of some 700 bank accounts in Switzerland from the French government and investigations are under way to determine whether any of the account holders evaded taxes.

To look into strengthening laws to curb black money generation and examine the existing legal and administrative framework, the government has constituted a panel under Central Board of Direct Taxes (CBDT) chairman in May this year. The panel includes senior officials from the CBDT, Enforcement Directorate, Directorate of Revenue Intelligence, currency unit and Financial Intelligence Unit and it is likely to submit its report in November.

To facilitate sharing of banking and other tax-related information, India has signed DTAAs with around 65 countries and has also renegotiated treaties with 40 nations.