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Swiss treaty won`t allow India to glean data

Although the Swiss Parl has ratified a treaty allowing Indian authorities to get information on illegal funds stashed in Swiss banks, the government can`t glean much data as the pact is applicable with prospective effect.



Mumbai: Although the Swiss Parliament has
ratified a treaty allowing Indian authorities to get
information on illegal funds stashed in Swiss banks, the
government can`t glean much data as the pact is applicable
with prospective effect, a top tax official said here on Tuesday.

"As far as I can remember, it is prospective...I think
it is prospective date, from the date the treaty comes into
effect," Central Board of Direct Taxes Chairman Prakash
Chandra told reporters here when asked about the prospects of
getting data from the Swiss banks.

This would mean that accounts opened in the secretive
Swiss Banks before the ratification of the treaty would not be
liable to scrutiny by Indian authorities.

Finance Minister Pranab Mukherjee and Swiss Federal
Councillor Micheline Calmy-Rey had in August last year signed
a protocol to amend the double taxation agreement (DTA) in the
area of taxes, which was ratified by the Swiss Parliament`s
upper house on June 17.

Chandra said that although the Swiss Parliament has
ratified the treaty, under the Swiss law around 90-100 days
are required to make the law take effect.

Once the treaty takes effect, "The understanding is
that yes, if we ask specific information with regard to a tax
payer giving details as asked for, then they are willing to
part with that (information) which earlier was not the case,"
Chandra said.

Meanwhile, Chandra said a Government-constituted
committee on black money has received more than 2,500
suggestions from across the country in the last 10 days to
deal with the issue.

When asked about efforts to re-negotiate DTAA with
Mauritius, news on which had led to a sharp fall in equity
markets earlier this month, Chandra said both the countries
have decided to take the negotiations - stuck since 2008 -
forward and will be meeting to discuss the modalities.

He, however, refused to give any timeframe for the same.
The BSE Sensex had tanked by 550 points in intra-day trade on
June 20 on fears that the Government might impose capital
gains tax on investments routed via Mauritius once the DTAA is
through.

Chandra said the quarterly tax numbers will have to grow
at a "sustained" 20-24 per cent in the coming quarters in
order to achieve the tax collection target of Rs 5,32,000
crore announced in the Budget.

In order to check the illegal fund flows, the Government
had decided to place Indian tax officers abroad and two such
officials have already been posted in Singapore and Mauritius.

Plans are afoot to operationalise similar offices in
Japan, UAE, Germany, UK, USA, France and Canada, he said.

PTI

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