Legacy tax issues like those involving Cairn and Shell can be referred to AP Shah panel for quick resolution, says Chief Economic Advisor Arvind Subramanian who feels the old issues that have held back private investments also need to be worked out.
Moving to defuse a row with overseas funds about back-dated tax demands, the government had last month spared foreign portfolio investors (FPIs) from minimum alternate tax (MAT) for the years prior to April 1, 2015.
This followed recommendations of the AP Shah Committee.
“The government set up AP Shah Committee and the MAT on FII thing has been put to rest. The Minister (Arun Jaitley) has also said that we will address legacy issues (like) Cairn and Shell,” Mr. Subramanian told PTI in an interview in New Delhi.
He said progress has been made on legacy tax issues and hoped to resolve them in the next few months.
Cairn Energy plc had on March 10 this year slapped an arbitration notice against the tax demand with regard to 2006 internal business reorganisation. The government has decided to join the arbitration initiated by British oil explorer over a tax demand of Rs. 10,247 crore and is considering to appoint its arbitrator.
As regards Shell, in November 2014, the Indian unit of Royal Dutch Shell Plc won Rs. 18,000 crore transfer pricing cases against I-T department at the Bombay High Court and the government is yet to take a view on appeal in the case.
Asked if transfer pricing cases will also be referred to Shah Committee, he said, “The remit of Shah panel is open to all legacy issues.... so on need to address basis I think other issues could be taken by Shah panel.”
He said the legacy issues that have held back private investments need to be worked out.
