U.K raises tax issues, India visa curbs

November 07, 2016 10:57 pm | Updated November 17, 2021 06:17 am IST - NEW DELHI:

The U.K. on Monday sought an early resolution of the Indian Government’s disputes with Cairn and Vodafone on retrospective taxation and raised concerns over “tax uncertainties” in India while New Delhi took up Britain’s “curbs” on visas for work and studies.

The India-U.K. Joint Economic and Trade Committee (JETCO) discussed these tax and visa-related issues, Nirmala Sitharaman, Commerce and Industry Minister Nirmala Sitharaman told reporters. The U.K. team was led by its Secretary of State for International Trade, Liam Fox. JETCO is the premier bilateral forum for government-level talks to identify challenges and opportunities in trade and investment issues, as well as find a solution to disputes.

Visa curbs

Referring to Britain’s visa ‘restrictions’, Ms.Sitharaman said “it seems that the U.K. is mainly interested in greater market access for its goods in India and in getting investments from India, but not in attracting talented Indian services professionals and students.”

The Minister said she told the U.K. officials that they should not mix up the issue of immigration with that of foreign skilled workers moving overseas for short duration.

On other issues, the Minister said the meeting did not take up the feud at Tata Group and its possible impact on India-U.K. business ties. Tata companies in the U.K. are in various sectors including automobiles, hotels, suites and residences, chemicals, IT and communications, beverages and steel, employing over 69,000 people.

Social security

Ms.Sitharaman also said India raised the issue of the lack of a bilateral totalisation (or social security) agreement with the U.K. to do away with dual social security taxation. As there is no India-U.K. totalisation agreement, Indian companies, including from the IT sector, have to shell out huge amounts to the U.K. Government towards social security, with no benefit (as the Indian employees do not stay on in the U.K.) or prospects of refund, she said.

Services TFA

In another important development, the U.K. extended support to India’s proposal for a ‘Trade Facilitation Agreement (TFA) for Services’ at the World Trade Organisation (WTO)-level. Its aims include streamlining procedures for global services trade, besides ensuring recognition at the WTO-level for services as a tradable item by establishing a framework -- for clarity on definitions and for settlement of disputes. The proposal has been welcomed by the WTO Director General Roberto Azevedo and Trade Ministers of several countries and India will soon submit a formal concept note on it before the WTO, Ms.Sitharaman said.

India and the U.K. also signed a Memorandum of Understanding (MoU) each on sharing of best practices on ‘ease of doing business’ and on Intellectual Property Rights. U.K. had assured to provide technological assistance at the state-level in India for better implementation of the Centre’s ease of doing business initiatives, Ms.Sitharaman said. During the JETCO meeting, Ms.Sitharaman raised the issue of the difficulties faced by Indian students who apply to British educational institutions due to the ‘complex processes and visa restrictions’. The Minister said, “due to these problems in the U.K., other countries like the U.S. and Australia are fast becoming the preferred option for Indian students.” She said the U.K., however, responded by stating that there was no “crackdown” on students as such but the processes were being tightened with an aim to weed out “spurious” institutions.

On the UK’s recent changes in visa policy towards curbing immigration, India took up its concerns on the higher minimum salary threshold for intra-company transfers. Besides, India raised the challenges faced by Indian companies and professionals who are required to share the financing of the U.K.’s skill development programmes, which is akin to a non-tariff barrier that affects the competitiveness of the Indian services sector, Ms.Sitharaman said.

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