Taxmen cannot ignore ‘brazen misuse’ of laws: Finance minister Nirmala Sitharaman | India News
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“When these trails of funds going to shell companies are in your face, I do not see how the CBDT or CBIC can remain a mute spectator. That has to be plugged to ensure that genuine taxpayers do not lose faith,” she said.
The minister was responding to a question about increased search activity by the tax department during a fireside interaction at the Economic Times Awards for Corporate Excellence.
Sitharaman said about 300 shell companies, operating in a 50sqm area, with just one table and a chair, were getting refunds to the extent of 400 crore.
“If the tax authorities are going to fear being accused of tax terrorism, the inefficiencies will perpetuate,” she said.
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Speaking at the Economic Times Awards for Corporate Excellence, finance minister Sitharaman gave an example of about 300 shell companies, operating in a 50 square metre area, with just one table and chair, that were getting refunds to the extent of Rs 400 crore. “If the tax authorities are going to fear being accused of tax terrorism, the inefficiencies will perpetuate,” she said.
During her interaction, Sitharaman said the private sector was ready to step up, demonstrated by the rush of investment in sunrise sectors. Refuting the narrative that the private sector was shying away from investment, Sitharaman said an indication of private sector expansion was the new business coming in semiconductors, renewable energy, rare earths and even space.
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The FM said Indian markets do not face any contagion risks due to the actions of foreign central banks, but exports to countries facing challenges could get impacted.
On El Nino, she said, “It is not an event happening for the first time, and readying the economy to meet an impact of a not-so-happy monsoon is part of our preparedness. But we have to be cautious.”
Sitharaman also said that if the global economy had not been disrupted after the government reduced corporate tax rates in September 2019, it would have been reasonable to nudge the corporate sector for not coming out with flying colours in response to the tax cuts. “But you had the pandemic and the uncertainties of the war. Despite all this, I see many expansions happening, new investments happening.”
On interest rates, the FM said, “I think most of you are happy with RBI’s pause, and I cannot think any differently. We should be confident that RBI will take the right decision for the next round as well.” She also said that the legislation requiring RBI to keep inflation within 4% was not a hindrance.
“Both the administration and public at large and industry in specific are not obsessed with the law (on inflation targeting). It was only in one instance that RBI had to write a letter concerning how the global markets were performing. It does not warrant me to meddle with the law at this stage.”
Maharashtra chief minister Eknath Shinde, who also spoke at the event, said the state government was going all out to welcome industry and has set itself a $1 trillion target in line with the Centre’s goal of achieving a $5 trillion economy.
Shinde said that in the last nine months, the state government had taken fast decisions and set up a think tank on the lines of Niti Aayog to promote investments. He said that the government has emerged from the policy paralysis that was experienced for two and half years under the earlier regime.
“We are happy that the corporate world has shown trust in our government. Over Rs 1.3 lakh crore of MoUs were signed in Davos. These MoUs are not just on paper, they are also being implemented,” said Shinde.
Shinde said Maharashtra is India’s growth engine, and the state has taken many steps to ensure that the engine keeps running. “Ours is a double-engine government with the state and the Centre working together. If the third engine of the industry joins the bullet train of development, our progress will be even faster,” said Shinde.
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