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No immunity scheme to bring back black money: Jaitley
The finance minister on Wednesday ruled out introducing an immunity scheme to unearth black money, saying it discriminates against the honest taxpayers.
In a debate on the Finance Bill, 2014, in the Rajya Sabha, Finance Minister Arun Jaitley also said the monsoon situation was not as bad as a fortnight or a month ago, but the government has back-up plans for the areas affected by the scanty rain.
He said the previous United Progressive Alliance government had specified that the General Anti-Avoidance Agreement would be implemented from the next financial year, while the present government was yet to take a call on its introduction.
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No immunity scheme to bring back black money: Jaitley
Replying to a debate on the Bill, Minister of State for Finance Nirmala Sitharaman said, "I would like to put on record that experience shows that when you bring in voluntary disclosure of income schemes, it discriminates against genuine taxpayers."
Those who do pay tax are disincentivised, she said. "... it goes against honest taxpayers and it may even be discriminatory.
So, it (VDIS) may not be a very conducive path for recovering more taxes," Sitharaman said.
The government had introduced VDIS in 1997 when the United Front was in power.
Those who opted for VDIS were granted immunity from prosecution under the Foreign Exchange Regulation Act, the Income Tax Act, the Wealth Tax Act and the Companies Act.
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No immunity scheme to bring back black money: Jaitley
However, a later report by the Comptroller and Auditor General slammed the scheme for various irregularities.
There were demands from various quarters to announce VDIS again, particularly for those who have stashed money abroad. The Budget did not announce any such scheme and Sitharaman ruled it out further.
Later, the Rajya Sabha returned the Bill to the Lok Sabha, completing the budgetary exercise in the two Houses.
It will now go to President Pranab Mukherjee for approval.
The finance minister is also likely to table a Bill to increase foreign investment limit in private insurance companies from 26 per cent to 49 per cent in the Rajya Sabha on Thursday, officials said.
The Bill, cleared by the Cabinet last week, provides that the control of insurance companies will have to be with Indian entities.
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No immunity scheme to bring back black money: Jaitley
The finance minister also made it clear that he was yet to take a call on implementation of GAAR and any amendments to it.
"The previous government has fixed the particular date.
"After the Budget process is over, we will be looking into it whether it is that date or some other date and whether some amendments are required or not and only then we will be able to make a final call on that."
GAAR, which aims to minimise tax avoidance for investments made by entities based in tax havens, is to come into effect from April 1, 2015, after being postponed for two years.
Announced by the previous UPA government in 2012-13 Budget, GAAR had created nervousness among investors.
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No immunity scheme to bring back black money: Jaitley
Sitharaman said GAAR is already a part of the statute.
It is going to be applied from assessment year 2016-17 or the financial year, beginning April one, 2015.
"We will of course assess it," she assured members of the House.
On the possibility of a drought and the government plans, Jaitley said the situation has improved of late due to delayed resurgence in monsoon.
"The situation is a little more optimistic than it was 15 days or 30 days ago. Therefore, we need not at this moment assume that there is a drought like situation. Monsoon has picked up belatedly."
In case, there is some area where agriculture crops are affected due to inadequate rain, the government has set guidelines to deal with that situation. "Those back-up plans are immediately put into action.
Therefore, whatever amount is required for those areas will be given," he said.
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No immunity scheme to bring back black money: Jaitley
To a query by former Civil Aviation Minister Praful Patel, Sitharaman said pilot training centres do not give certificates and as such would certainly attract service tax.
On various states' demand to give them tax rebates and special category status, Jaitley said the 14th Finance Commission is dealing with the situation.
"We do expect a report by the end of this year.
"Therefore, we will take up the matter as and when we receive the report."
