The Budget 2008-09 has many amendments with retrospective effect that would lead to prolonged litigations and hamper the continuity of economic development process in the country.
Generally, the amendments to the tax provisions have come into effect with a future date. However, there are certain amendments are back dated. Such arrangements will provide a chance to open cases that were settled earlier, industry experts opined.
"There are 12 retrospective amendments in this year's Budget. This shows scant regards for the law, as Supreme Court and High Court had earlier commented against such practices. This makes it difficult to give certainty to the tax advise," PricewaterhouseCoopers Executive Director (Tax & Regulatory Services) Dinesh Kanabar said.
Citing a couple of examples, Kanabar said that the Budget had made amendments in 'computing writing down for the process of depreciation', 'circumstances in which a case can be reopened' and `assesses in default cases' among others.
Another important factor is the poor wording in 'foreign currency exchangeable bonds', the meaning of which is not clear and could lead to litigations, he said.
Kanabar, who was speaking at a post-budget discussion of tax issues – 'Talking Tax' – also mentioned that this lack of clarity would lead to prolonged litigations that run to over 10-15 years. The continuity of the economic progress would be lost due to such issue, he added.
Talking to Business Standard on sidelines of the event, Grasim Industries director and Chief Financial Officer D D Rathi also voiced the same opinion.
"All that we are asking is for a simple and clear taxation format. The present tax issues are confusing, leading to arbitrations and litigations. There are court cases pending from 1949," Rathi added. |
