March, 2005

The Government has recently approved the signing of a limited multilateral agreement among SAARC countries (India, Bangladesh, Bhutan, Nepal, Pakistan, Sri Lanka & Maldives) for avoidance of double taxation and to provide for mutual administrative assistance in tax matters. The agreement had been in the making since 1996, when the seventh meeting of the Committee on Economic Cooperation of SAARC decided to have a multilateral treaty for avoiding double taxation.

March, 2005

The Government proposes to introduce a Bill in the ongoing budget session of Parliament that would pave the way for the setting up of a National Tax Tribunal with at least 25 benches across the country.

The Tribunal, which would examine cases relating to both direct and indirect taxes, is to be set up for speedy disposal of tax cases pending before the various high courts of the country. The pendency of large number of tax cases in the High Courts has resulted in huge revenues being blocked in litigation, thereby adversely affecting the economy.

Besides the fast disposal of cases, the Tribunal is also expected to bring about uniformity in the decision-making process. The National Tax Tribunal Bill, 2004, provides for the establishment of National Tax Tribunals for adjudication of disputes relating to levy, assessment, collection and enforcement of direct taxes, determination of the rates of duties of customs and central excise on goods, the valuation of goods for the purpose of assessment of such duties and also the levy of tax on services.

The Tribunal would hear cases on substantial question of law from decisions of the Income Tax Appellate Tribunal and the Customs, Excise and Service Tax Appellate Tribunal. The chairperson of the proposed Tribunal would be a retired judge of the Supreme Court or a retired Chief Justice of the High Court.