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| BJP looks to gain traders' trust, slams tax code |
| Vrishti Beniwal / New Delhi Oct 25, 2009, 00:54 IST |
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The debate on the proposed direct tax code has taken a political turn. Lambasting the government for “focusing merely on tax collection” and “ignoring economic development,” the chartered accountant (CA) cell of the Bhartiya Janata Party (BJP) has floated a discussion paper to identify gaps in the proposed law.
The code is the brainchild of former finance minister and home minister P Chidambaram, who has practiced law for long enough to draft one himself. The idea to generate a debate on the code emanated from another lawyer, BJP General Secretary Arun Jaitley.
Jaitley got the national convener of the party’s CA cell, Gopal K Agarwal, to organise a seminar on the code. Hundreds of chartered accountants from length and breadth of the country turned up to attend the three-hour-long seminar in the national capital on Friday evening. The session, which saw some enthralling speeches from guest speakers as well as Jaitley in a jam-packed auditorium, was the first in the series of discussions the party would organise on the code in the coming days.
The main opposition party, which has received a series of electoral setbacks in general and assembly polls at the hands of the ruling Congress, will also take on the government in Parliament on the issue. As industry and tax experts have slammed the code in one voice, it will be easy for the BJP, which is always considered close to the business community, to garner more support on the issue and corner the government.
The BJP has suggested that instead of general anti-avoidance rules, the code should specify anti-avoidance rules citing specific situations. It has also recommended levy of minimum alternate tax on book profits instead of gross assets and retaining the existing basis of reopening cases in the court. It has also favoured sticking to the existing EEE (tax exemption at deposit, withdrawal and maturity stages) in the savings scheme regime instead of the EET, un which an individual pays tax at the maturity of the saving instrument.
The speakers, Rahul Garg and Girish Ahuja, said that according to this code, if a foreign company had even one agent in India, it would mean the company had a presence in India and was liable to pay tax. They said the tax code had changed the definition of domestic company, where a resident company in another country (for example, Corus) partly controlled by an India company (Tatas) would have to pay tax here.
Ahuja, a fellow of the Institute of the Chartered Accountants of India (ICAI), alleged there were 380 mistakes in the code.
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