No lack of coordination with revenue dept on TRC: Mayaram

The revenue dept was quick to clarify that intention was not to create new provision for creating any barrier or difficulty for investors

After Budget proposals on Tax Residency Certificate (TRC) spooked the markets last week, Economic Affairs Secretary Mayaram today said there was no lack of coordination between capital markets division and the revenue department on TRC.   

“Finance Bill is a very large Bill. Which Section and what wording has spooked whom is very difficult to predict. I don’t think there is any lack of coordination between the departments. The Department of Revenue is also on board with the entire process of creating right environment for investors,” Mayaram told Business Standard.

He explained tax laws are always difficult to frame because government’s intentions are sometimes misunderstood by investors. He, however, added in the case of TRC the revenue department quickly clarified that the intention was not to create any new provision for creating any barrier or any difficulty for investors.

“It was only something which was part of memorandum and brought into statute. Finance Minister has already said in case there is any need for rewording the sentences then the revenue department will consider it during the discussion. But for now investors have realized that this was not the intention. I don’t think there is any issue with TRC anymore,” he added.

In the Budget 2013-14, the government had said Tax Residency Certificate is a necessary but not sufficient condition for availing benefits of the DTAA. After markets reacted negatively to the news, the finance ministry last week issued a clarification on the applicability of the provision and said that the concerns raised on its language, will be suitably addressed at the time of consideration of the Finance Bill.