COMMENT: Why Indian taxpayers need to be patient during a busy 2012
International Tax Review is part of the Delinian Group, Delinian Limited, 4 Bouverie Street, London, EC4Y 8AX, Registered in England & Wales, Company number 00954730
Copyright © Delinian Limited and its affiliated companies 2024

Accessibility | Terms of Use | Privacy Policy | Modern Slavery Statement

COMMENT: Why Indian taxpayers need to be patient during a busy 2012

india-flag.jpg

Rumours of delays in the implementation of India's Direct Taxes Code (DTC) and goods and service tax (GST) should be welcomed by taxpayers.

While there has been no formal announcement confirming that both of these changes will not be effective on April 1 2012, you would be hard pushed to find an Indian tax professional prepared to bet that this target will be met.

So why are these delays good news? Surely, having certainty and being given ample time to prepare for change is vital for business operations?

But what needs to be realised is that the reason for the holdup is that the government is not happy with the laws and are not prepared to let them loose on the public.

The DTC and GST have already been delayed a number of times and so this would suggest that there are still more problems to overcome.

At the end of 2011, International Tax Review organised and attended Indian tax conferences where these two topics dominated discussions. Delegates argued about the challenges of preparing for change. This is a fair argument. How many countries would drastically alter their direct and indirect tax laws at the same time, to take effect on the same day, and expect everything to go smoothly?

Matching these arguments were professionals eager for the government to listen to their concerns and implement them rather than rush in an imperfect law that will lead to increased litigation and higher levels of uncertainty – something that would do little to improve India's image to investors around the world.

The only solution, and this may not be popular with taxpayers, is to sit tight and carry on business as usual. Speculation as to why things have been delayed and the growing anger pointed towards the government will not help speed things along and will damage the image India portrays to the wider world as a place to do business.

The image of India's tax system to the rest of the world is the focus of this month's cover story of India Quarterly. While the future of the DTC and GST is still unknown, India still attracts high levels of foreign investment in all sectors. But with numerous tax obstacles to navigate around, the feature offers some practical guidance as to how a company looking to direct resources to India can avoid the tax pitfalls of foreign investment.

FURTHER READING:


COVER STORY: How to successfully invest into India

INSIGHT: What to expect in next month's budgetANALYSIS: How India’s increased OECD cooperation will increase taxpayer scrutiny

more across site & bottom lb ros

More from across our site

Despite the relief, Brazil’s government has also presented a bill which seeks to re-impose a tax burden on companies’ payroll, one local tax specialist told ITR
Jeremy Brown arrives at the firm after a near 16-year career with Deloitte
PwC could elect a woman into the senior leadership position for the first time; in other news, KPMG Australia has extended its CEO’s term
The Senate report into PwC’s scandal is titled ‘The cover up worsens the crime’
Law firms that are conscious of their role in society are more likely to win work, according to a survey of over 23,000 in-house professionals
The firm’s tax business generated a quarter of HLB’s overall revenues in 2023
While successful pillar two implementation will require collaboration across all units, a combination of internal and external tax advice is at the centre of the effort
Binance has also been accused of manipulating foreign exchange rates via currency speculation and rate-fixing
Six individuals should have raised questions over information they received but did not breach professional standards, according to the firm
The partnership of KPMG UK has installed Holt for a second term as CEO and senior partner; in other news, a Baker McKenzie partner has sued the IRS
Gift this article