Has India's Budget 2013 Met Expectations?
The highly anticipated Budget 2013 has been released to much discussion. Mukesh Butani, Taxand India, provides his opinion.
On tax residency requirement being necessary, but, not tricky, gauging the mood of the foreign institutional investors and markets, the Finance Minister in his late afternoon media interaction has agreed to issue a clarification soon. Hence, it would be not appropriate for me to express a point of view before reviewing the clarification. The same provision featured in last years budget supplementary document, but, not in the Finance Bill. All that seems to have been done is featuring in the Bill. Markets viewed it as a limited form of GAAR.
The budget speech made a mention of Rangachary committee recommendations on IT and ITeS and R&D centres and that the expert committee report date has been extended to March 31, 13 and the FM pledged his support for safe harbour provisions.
On the ongoing Transfer Pricing controversies, the FM defended by remarking that it was a case of interpretation.
On wider tax reforms, by by bringing the DTC bill in current session, the FM has signalled a passage of the new code in 2014. He has also provided for compensation to states, a long standing demand for state tax. If the states accept the offer, it could possibly pave way for passing the GST constitutional Bill."
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