'India to sign Tax, Trade treaties with ASEAN'
New Delhi, Aug 29: India proposes to sign trade and tax treaties with countries in ASEAN bloc in addition to Thailand and Sri Lanka, Advisor to Finance Minister, Dr Parthasarathi Shome said today.
He said the government was also contemplating to conduct joint audit for multinationals (MNCs) operating in India and ASEAN to monitor their annual statements.
''Trade and tax treaties with ASEAN countries are in the offing to harmonise India's international taxation system with those of ASEAN countries so that trade related issues between India and ASEAN are resolved for good and the two blocs have necessary trade flow to widen its present volume,'' Dr Shome told reporters.
China had similar arrangements with some of its friendly countries and India might shortly emulate China in this regard, said Dr Shome at the two-day International Tax Conference organised by Assocham here.
He, however, made it clear that India would not make its cross border tax administration policy for MNCs so stringent as is in vogue in countries like Malaysia and Indonesia, rather its taxation policy would be based on Singapore model which is simplified and easier for tax administration.
Besides, Dr Shome said the finance ministry had completed the ground work for the new IT Act and the draft report would be shortly submitted to the Finance Minister for which a presentation would be made within few days.
The joint audit would also be effected by the Government in collaboration with its states wherever the MNCs are simultaneously operational within the periphery of Centre and those of states to ensure that their balance sheet and annual statements do not come out with conflicting figures, said Dr Shome.
Dr Shome ruled out any incentives for export of capital from domestic industry to their overseas destinations, saying that it made no sense for the Government to extend such incentives.
Assocham President Anil K Agarwal said India's international tax system needed flexibilities and little more monitoring to ensure that no tax evasion takes place and therefore sought removal of ambiguities in the existing tax administration policy of government.
ASSOCHAM Committee on Tax Reforms and International Tax Chairman Nihal Kothari said in a globalised economy, there should be harmony in the administration of taxation particularly for corporates that have been operating in developing countries like India to ensure that their manufacturing base is retained within the country.