NEW DELHI, JUNE 09, 2010: WHILE addressing the gathering of DGITs and CCITs at CBDT's annual conference here today, the Finance Minister, Mr Pranab Mukherjee, said that the recent financial crisis has shown how an economic difficulty of one country can get exported to other countries. Similarly, the development of tax shelter products and use of tax havens is another challenge, which emanates from globalization. In response to the global challenges two Income Tax Overseas Units (ITOUs) within Indian Missions in Singapore and Mauritius have been set up to facilitate exchange of information. Eight more such units in USA, UK, Netherlands, Japan, Cyprus, Germany, France and UAE are also being created on similar lines. These measures would result in seamless flow of tax related information from foreign tax jurisdictions and would strengthen the fight against the menace of tax evasion using cross border transactions, he added.

The Minister further stated that the rising litigation with the taxpayers and the quantum of revenue locked in appeals is a matter of serious concern. The strengthening of Settlement Commission, setting up Dispute Resolution Panel (DRP) may address the litigation issues with the taxpayers to some extent. The FM mentioned that under mutual agreement procedure (MAP) negotiations under Indo-USA DTAA tax demand of Rs 800 crore in 48 cases has been confirmed. He said that this is a good development and taxpayers should be encouraged to invoke MAP, which has emerged as a preferred alternate dispute resolution mechanism. In spite of these efforts, more strategies needed to be developped to reduce the litigation with the taxpayers.The FM said that he would like CBDT to come out with a comprehensive proposal to address the issue of unwanted litigation with taxpayers and also to realise locked up revenue in appeals.

Talking about the tax reforms, the Minister said that the revised DTC Bill will be put in public domain before the Bill is tabled in the Parliament during the Monsoon Session.