Coimbatore, February 12, 2018
The amendment to the Income Tax Act by introducing e-assessment for all from April 1, 2018, though a welcome move, is causing some anxiety amongst industry stakeholders here.
"This jurisdiction-free assessment should be tried within the state/ region, considering the diversity in the nature and culture of the business," G Karthikeyan of GKM Tax Advisors (P) Ltd, told BusinessLine on the sidelines of a discussion on ‘Budget Analyis 2018 - Direct Taxes, GST, eWay Bill, and Economic Impact,’ held at the Chamber Hall here.
He, however, did not fail to add that the jurisdiction-free assessment would eliminate person-to-person contact and aid in promoting transparency. "But there could be unnecessary litigation on account of the regional nature and culture of the business. The government should, therefore, ensure that there are no unnecessary litigations or confusion in the process," he said.
He touched upon various tax relief announcements, before stating that the one area where the government seems to have been proactive was with reference to the Bankruptcy and Insolvency Code, which always seemed a pain for investors and creditors. Provision of tax relief will help make stressed companies more attractive to potential buyers. The move comes against the backdrop of the rising number of companies being referred to the National Company Law Tribunal in 2017.
The Budget proposes to promote restructuring plans by introducing tax incentives such as the ability to carry forward losses despite change in ownership and Minimum Alternate Tax (MAT) relief to the extent of unabsorbed depreciation and carried forward loss where a company has been admitted into the bankruptcy process. These proposals should trigger interest amongst investors in distressed assets, Karthikeyan noted.
Yet another highlight of the Budget discussion was on the proposed move to expand the scope of ‘Business Connection’ (permanent establishment) to include "economic presence" for international transactions. "This would effectively mean that companies would be reluctant to undertake transactions with Indian entities other than through treaty countries, given the expanded scope of the provisions. The possibility of huge litigations cannot be ruled out,” he said. The Hindu BusinessLine and The Hindu (Tamil) were media sponsors to the event
[The Hindu Business Line]