Just a moment...

Top
Help
×

By creating an account you can:

Logo TaxTMI
Call Us / Help / Feedback

Contact Us At :

E-mail: [email protected]

Call / WhatsApp at: +91 99117 96707

For more information, Check Contact Us

FAQs :

To know Frequently Asked Questions, Check FAQs

Most Asked Video Tutorials :

For more tutorials, Check Video Tutorials

Submit Feedback/Suggestion :

Email :
Please provide your email address so we can follow up on your feedback.
Category :
Description :
Min 15 characters0/2000
Make Most of Text Search
  1. Checkout this video tutorial: How to search effectively on TaxTMI.
  2. Put words in double quotes for exact word search, eg: "income tax"
  3. Avoid noise words such as : 'and, of, the, a'
  4. Sort by Relevance to get the most relevant document.
  5. Press Enter to add multiple terms/multiple phrases, and then click on Search to Search.
  6. Text Search
  7. The system will try to fetch results that contains ALL your words.
  8. Once you add keywords, you'll see a new 'Search In' filter that makes your results even more precise.
  9. Text Search
Add to...
You have not created any category. Kindly create one to bookmark this item!
Create New Category
Hide
Title :
Description :
❮❮ Hide
Default View
Expand ❯❯
Close ✕
🔎 TMI Notes - Adv. Search
TEXT SEARCH:

Press 'Enter' to add multiple search terms. Rules for Better Search

Search In:
Main Text + AI Text
  • Main Text
  • Main Text + AI Text
  • AI Text
Law:
---- All Laws----
  • ---- All Laws----
  • Benami Property
  • Bill
  • Central Excise
  • Companies Law
  • Customs
  • DGFT
  • FEMA
  • GST
  • GST - States
  • IBC
  • Income Tax
  • Indian Laws
  • Money Laundering
  • SEBI
  • SEZ
  • Service Tax
  • VAT / Sales Tax
Types:
---- All Types ----
  • ---- All Types ----
  • Act Rules
  • Case Laws
  • Circulars
  • Manuals
  • News
  • Notifications
Sort By: ?
In Sort By 'Default', exact matches for text search are shown at the top, followed by the remaining results in their regular order.
RelevanceDefaultDate
    NewsBill
    Amendment in the definition of the specified fund
    NewsBill
    Amendment in the provision relating to merger of non-profit organisations (NPOs)
    NewsBill
    Amendment in the provisions relating to the violations by a registered NPO
    NewsBill
    Amendment of section 332(1)(f) of the Income-tax Act, 2025 to remove certain funds from the requirem...
    NewsBill
    Amendment in section 349 of the Income-tax Act, 2025 to provide for filing of belated return by NPO
    NewsBill
    Non-allowability of Interest as a deduction against Dividend Income
    NewsBill
    Rationalisation of Schedule XI relating to Provident Funds
    NewsBill
    Exemption for Sovereign Gold Bond
    NewsBill
    Increase in tax rates of Securities Transaction Tax
    NewsBill
    Taxation of buyback of shares
    NewsBill
    No tax to de deducted at source in respect of interest income credited or paid to any co-operative s...
    NewsBill
    AMENDMENT TO THE CUSTOMS ACT, 1962
    NewsBill
    AMENDMENTS TO THE CUSTOMS TARIFF ACT, 1975
    NewsBill
    AMENDMENT TO RULES UNDER CUSTOMS ACT, 1962
    NewsBill
    OTHER PROPOSALS INVOLVING CHANGES IN BASIC CUSTOMS DUTY RATES IN NOTIFICATIONS
    NewsBill
    OTHER CHANGES PROPOSED IN THE CUSTOM NOTIFICATIONS
    NewsBill
    REVIEW OF CUSTOMS DUTY EXEMPTIONS
    NewsBill
    Review of exemptions prescribed by other notifications.
    NewsBill
    SOCIAL WELFARE SURCHARGE (SWS)
    NewsBill
    AGRICULTURE INFRASTRUCTURE AND DEVELOPMENT CESS (AIDC)
❯❯
MaximizeMaximizeMaximize
0 / 200
Expand Note
Add to Folder

No Folders have been created

    +

    Are you sure you want to delete "My most important" ?

    NOTE:

    Notes
    Showing Results for :
    Reset Filters
    Results Found:
    Show All SummariesHide All Summaries
    NewsBill
    Show AI Summary
    Specified fund definition aligned with income tax provision, effective April 1, 2026 for tax year 2026 27 onward.
    Amendment aligns the definition of specified fund in Note 1(g) to Schedule VI with the income tax provision definition, so that existing Sl. Nos. 1-4 of Schedule VI apply to any entity that meets the aligned specified fund definition; the amendment takes effect from 1 April 2026 and applies to the tax year 2026-27 and thereafter.
    NewsBill
    Show AI Summary
    Merger of non-profit organisations exempt from accreted-income tax if same or similar objects and prescribed conditions are met.
    A new provision exempts registered non-profit organisations from accreted-income tax on merger when the transferee and transferor are registered non-profit organisations with the same or similar objects and the merger meets prescribed conditions; the merger-liability rule is amended to make tax payable where the merging entity is non-registered, where a registered non-profit's merger fails to satisfy prescribed conditions despite similar objects, or where objects are not the same or similar.
    NewsBill
    Show AI Summary
    Registered non-profit organisations: commercial activity for public utility no longer treated as a specified violation risking registration cancellation.
    The amendment removes commercial activities by registered non-profit organisations carried out for advancement of General Public Utility from the category of specified violation in section 351, preventing such activity from triggering registration cancellation, and aligns the treatment with other violation provisions; effective 1 April 2026 for tax year 2026-27 and thereafter.
    NewsBill
    Show AI Summary
    Registration requirement removed for certain Schedule VII funds to align exemption rules under the Income-tax regime.
    Amendment excludes persons listed in Schedule VII (Table Sl. No. 10-16) from section 332(1)(f) of the Income-tax Act, 2025, removing their obligation to register under section 332 to claim income-tax exemption and aligning registration requirements with the Income-tax Act, 1961; effective 1 April 2026 for tax year 2026-27 onwards.
    NewsBill
    Show AI Summary
    Belated filing by registered non-profit organisations is permitted under amended section 349 referencing belated-filing provision.
    The amendment enables registered non-profit organisations to file belated income-tax returns by adding a cross-reference to the belated-filing provision within the statutory rule governing return filing by such organisations, restoring the belated-filing ability previously available and applying from 1 April 2026 to the 2026-27 tax year and thereafter.
    NewsBill
    Show AI Summary
    Dividend income: interest deductions disallowed for earning dividend or mutual fund unit income from April 1, 2026.
    The Finance Bill amends the law to disallow any deduction for interest expenditure incurred in earning dividend income or income from units of mutual funds, removing the earlier deduction that had been permitted up to a twenty per cent ceiling of gross dividend or mutual fund income; the change applies prospectively from the Bill's implementation date and affects income taxed under Income from other sources.
    NewsBill
    Show AI Summary
    Provident fund tax rules are realigned to the EPF framework, removing legacy contribution limits and investment cap.
    Align recognised provident fund tax provisions with the EPF framework by omitting parity and percentage-based restrictions that duplicate the Rs.7.5 lakh unified employer contribution cap, restrict recognition to funds exempt under section 17 of the EPF Act, remove the fifty per cent statutory limit on Government securities investment, and retain regulatory oversight via subordinate EPF instruments; effective 1 April 2026 for tax year 2026-27 onward.
    NewsBill
    Show AI Summary
    Sovereign Gold Bond exemption limited to original subscribers who hold until maturity, effective for tax year 2026-27 onward.
    The capital gains exemption for Sovereign Gold Bonds is confined to bonds subscribed at original issue and held continuously until redemption on maturity, to ensure uniform application across all Reserve Bank of India issuances.
    NewsBill
    Show AI Summary
    Securities Transaction Tax rates for options and futures increased; revised rates apply to transactions on or after April 1, 2026.
    A calibrated revision raises STT on derivatives: sale of an option in securities from 0.1% to 0.15% of the premium; sale of an exercised option from 0.125% to 0.15% of the intrinsic price; and sale of a future in securities from 0.02% to 0.05% of the traded price. The changes aim to curb disproportionate speculation in futures and options trading, take effect from 1 April 2026, and apply to transactions in options and futures entered into on or after that date.
    NewsBill
    Show AI Summary
    Taxation of share buybacks reclassified as capital gains; higher tax rates apply to promoters and promoter companies.
    Consideration received on buy-back of shares is recharacterised from dividend income to taxable capital gains, with cost of acquisition of extinguished shares remaining separately recognised. Promoters will face an effective tax liability of thirty per cent on buy-back gains (tax at applicable rates plus an additional tax) and promoter companies will face an effective tax liability of twenty-two per cent. These amendments apply from the first day of the relevant financial year and to the tax year 2026-27 and subsequent years.
    NewsBill
    Show AI Summary
    Interest paid to co operative societies carrying on banking exempt from TDS under Finance Bill amendment effective April 1, 2026.
    The Act is amended to align with the Income tax Act, 1961 by providing that deduction of tax at source shall not be made on interest income (other than interest on securities) credited or paid to any co operative society engaged in carrying on the business of banking, including a co operative land mortgage bank; the amendment takes effect from 1 April 2026.
    NewsBill
    Show AI Summary
    Indian-flagged fishing vessels beyond territorial waters get specific customs rules, including duty-free landing and entry procedures.
    Amendments extend Customs Act jurisdiction for fishing activities beyond territorial waters, define Indian-flagged fishing vessel, and insert section 56A to permit duty free importation of fish harvested beyond territorial waters and to treat fish landed at foreign ports as exports while authorising rules on entry, declaration, custody, examination, assessment, clearance, transit and transhipment. Other amendments deem certain penalties a charge for non payment of duty, fix advance rulings' validity at five years with transitional extensions, allow removal of warehoused goods between warehouses without prior officer permission, and enable regulations for custody of imported or export bound goods.
    NewsBill
    Show AI Summary
    Customs tariff amendments adjust basic customs duty rates, create new tariff lines, and reclassify import items effective Feb-May 2026.
    The First Schedule to the Customs Tariff Act, 1975 is amended to change Basic Customs Duty rates and to create new tariff items: immediate BCD increases effective 02.02.2026 (via provisional declaration), targeted BCD decreases effective 01.04.2026, and a comprehensive reclassification and rate migration from exemption notifications into the Tariff Act effective 01.05.2026, preserving applied duty levels while enabling better product identification and monitoring.
    NewsBill
    Show AI Summary
    Baggage rules updated; deferred import duty payments shifted to monthly for eligible importers, creating a new eligibility class.
    The baggage regime is replaced by Baggage Rules, 2026 to clarify temporary carriage of goods, avoid unnecessary detention, and restructure Transfer of Residence benefits by duration of stay, effective 02.02.2026; deferred import duty payment frequency is changed from 15 days to monthly and a new class of eligible importers is created by amending the Deferred Payment of Import Duty Rules, 2016.
    NewsBill
    Show AI Summary
    Basic Customs Duty changes: several commodities moved to nil duty while potassium hydroxide sees a 7.5% levy increase.
    Amendments to Basic Customs Duty effective 2 February 2026 alter duty incidence for specified imports: monazite, sodium antimonate for solar glass, nuclear power generation goods and control/burnable absorber rods, and specified microwave-oven manufacture components are moved to nil duty, while potassium hydroxide is newly subject to a 7.5% basic customs duty; consult the notification for full descriptions.
    NewsBill
    Show AI Summary
    Customs BCD exemptions extended to BESS, aircraft parts, nuclear projects, specified drugs and select critical minerals.
    BCD exemptions are expanded to cover capital goods for Battery Energy Storage Systems and to extend relief for aircraft raw materials and components (including engines) for manufacture or maintenance when imported by defence Public Sector Units, subject to the IGCRS Rules, 2022 and an end use certificate from a Joint Secretary level officer. Exemptions for goods for specified Nuclear Power Projects are broadened irrespective of capacity and extended through 30.09.2035. Lists in the customs notification are updated to add medicines and rare diseases for personal import exemptions, and select critical mineral entries are being consolidated into the tariff with the prior notification to be rescinded.
    NewsBill
    Show AI Summary
    Customs duty exemptions: 102 conditional entries extended, 22 allowed to lapse, and select unconditional exemptions omitted.
    A review of notification No. 45/2025 Customs extends validity of 102 conditional exemption/concessional BCD entries to 31.03.2028, allows 22 conditional entries to lapse on 31.03.2026, and omits specified unconditional exemptions effective 02.02.2026 so applicable BCD rates will apply from the First Schedule. The review also removes or prescribes sunset clauses, modifies certain entries (including mergers, description changes, and extended time limits), and incorporates some rates into the Tariff.
    NewsBill
    Show AI Summary
    Budget changes extend BCD exemptions for listed goods to March 31, 2028 and omit redundant notification entries.
    Extension of certain BCD exemptions to 31.03.2028 is prescribed for specified notifications covering precious stones on approval/return basis, goods imported for execution of export orders for jobbing, copper products from reverts, and gold/silver from copper anode slime exported for toll smelting. One standalone exemption for castor oil cake manufactured in SEZs and brought to DTA lapses on 31.03.2026, and a notification exempting works of art and antiques for public exhibition is given a sunset date of 31.03.2028. Selected exemption entries in notification No. 36/2024-Customs are omitted effective 02.02.2026 as redundant, with BCD rates to operate via the First Schedule of the Customs Tariff Act, 1975.
    NewsBill
    Show AI Summary
    Social Welfare Surcharge changes extend specific customs exemptions, add SWS on personal-use imports, and exempt electronic toys.
    Amendments to notification No. 11/2018-Customs consolidate and preserve SWS exemptions for specified graphite, quartz, silicon dioxide and related items; reassign concessional BCD for sub heading 2106 90 to the First Schedule while retaining SWS incidence; modify the spent catalyst/ash exemption description to remove a lapsed cross reference without altering exemption; impose SWS on all dutiable personal use imports under heading 9804; and exempt parts and goods under heading 9503 (electronic toys) from SWS.
    NewsBill
    Show AI Summary
    New aircraft rubber pneumatic tyres continue to attract 0.5% agriculture infrastructure and development cess from 02.02.2026.
    New pneumatic tyres of rubber used on aircraft under tariff item 4011 30 00 will continue to attract a 0.5% Agriculture Infrastructure and Development Cess. The notification entry is amended to omit reference to a removed exemption entry with effect from 02.02.2026, without changing the 0.5% AIDC rate for these goods (other than those with nil basic customs duty).

    TMI Notes

    Back

    All TMI Notes

    Showing Results for :
    Reset Filters
      No Records Found

      TMI Notes

      Back

      All TMI Notes

      whatsappJoin Channel
      Showing Results for : Reset Filters

      Introduction of concept of mediation and Advance Ruling System for Residents to reduce tax litigation and more clarity

      15 September, 2020

      Contents
      Plus +
      Summary
      Note

      Note

      -

      Bookmark

      Print

      Print

      2020 (9) TMI 496 - Supreme Court

      While decided an issue pertaining to AY 1976-77, honorable Supreme Court has wrote two postscript with the following note:

      We have been persuaded to write two postscripts on account of the backbreaking dockets which are ever increasing and as a move towards a trust between the Tax Department and the assessee, and we hope that both the aspects meet consideration at an appropriate level. [Para 21]

       

      Postscript 1:

      1. The Indian legal system is reeling under a docket explosion.

      The Government and public authorities are active contributories to this deluge. To top it, a number of litigations arise inter se the Government and its bodies and, thus, the only question, as stated in the beginning, is which pocket of the Government will be benefitted?

      2. The aforesaid position resulted in a judicial innovation with the Supreme Court passing orders in Oil and Natural Gas Commission & Anr. v. Collector of Central Excise [1991 (10) TMI 58 - Supreme Court] requiring that such cases must be referred to a Committee to be appointed by the Government to facilitate a resolution of such disputes and that no case should be filed without the approval of this Committee. This system was a failure as is apparent from the facts of the present case, where the SLP filed by the appellant-Corporation was initially dismissed with liberty to revive the same in case the High Powered Committee granted such a permission which was so granted in a meeting held on 14.08.2009. The said Committee discussed the legal ramifications, and in some way opined in favour of the appellant-Corporation, as is apparent from the discussion aforesaid. But the ball was again lobbed back into the Court to adjudicate the said issue rather than a resolution being reached. The result was only the revival of the appeal, and the consequent decision which has seen the light of the day only now.

      3. The aforesaid failure of the system resulted in the Supreme Court recalling its orders in the ONGC cases vide Electronics Corporation of India v. Union of India. [2011 (2) TMI 3 - Supreme Court].

      4. The Central Government and the State authorities have been repeatedly emphasising that they have evolved a litigation policy. Our experience is that it is observed more in breach. The approach is one of bringing everything to the highest level before this Court, so that there is no responsibility in the decision-making process – an unfortunate situation which creates unnecessary burden on the judicial system. This aspect has also been commented upon in a judgment of this Court in Union of India & Ors. v. Pirthwi Singh & Ors., [2018 (4) TMI 1586 - Supreme Court]   albeit between the Government and the private parties, where the question of law had been settled and yet the appeal was filed only to invite a dismissal. The object appears to be that a certificate for dismissal is obtained from the highest court so that a quietus could be put to the matter in the Government Departments. Undoubtedly, this is complete wastage of judicial time and in various orders of this Court it has been categorized as “certificate cases”, i.e., the purpose of which is only to obtain this certificate of dismissal.

      5. The 126th Law Commission of India Report titled ‘Government and Public Sector Undertaking Litigation Policy and Strategies’ debated the Government versus Government matters which weighed heavily on the time of the Courts as well as the public exchequer. This was as far back as in 1988. It was only in the year 2010 that the National Litigation Policy (for short ‘NLP’) was formulated with the aim of reducing litigation and making the Government an efficient and responsible litigant. Five (5) years later it reportedly saw a revision to increase its efficacy, but it has hardly made an impact. In the year 2018, the Central Government gave its approval towards strengthening the resolution of commercial disputes of Central Public Sector Enterprises (for short ‘CPSEs’)/ Port Trusts inter se, as well as between CPSEs and other Government Departments/Organisations. The aim was and is to put in place a mechanism within the Government for promoting a speedy resolution of disputes of this  kind, however it excluded disputes relating to Railways, Income Tax, Customs and Excise Departments. It has now been made applicable to all disputes other than those related to taxation matters. This was pursuant an order passed in The Commissioner of Income Tax (Exemptions) v. National Interest Exchange of India -SLP (C) Diary No. 35567 of 2019 [2020 (3) TMI 1250 - SC ORDER] by a bench of which one of us (Sanjay Kishan Kaul, J.) was a part.

      6. Insofar as non-taxation matters are concerned, the Administrative Mechanism for Resolution of CPSEs Disputes was conceptualised to replace the Permanent Machinery of Arbitration and to promote equity through collective efforts to resolve disputes. It has a two-tiered structure.

      7. At the first level, commercial disputes will be referred to the Committee comprising Secretaries of the Administrative Ministries/Departments to which the disputing parties belong and the Secretary, Department of Legal Affairs. In case the two disputing parties belong to the same Ministry/Department, the Committee will comprise Secretary of Administrative Ministry/Department concerned; the Secretary, Department of Legal Affairs and the Secretary, Department of Public Enterprises. If a dispute is between a CPSE and a State Government Department/Organisation, the Committee will comprise of the Secretary of the Ministry Department of the Union to which the CPSE belongs, the Secretary, Department of Legal Affairs and the Chief Secretary of the State concerned. Such disputes are ideally to be resolved at the first level itself within a time schedule of three (3) months, and in the eventuality of them remaining unresolved, the same may be referred to the Cabinet Secretary at the second level, whose decision will be final and binding on all concerned.

      8. We are of the opinion that one of the main impediments to such a resolution, plainly speaking, is that the bureaucrats are reluctant to accept responsibility of taking such decisions, apprehending that at some future date their decision may be called into question and they may face consequences post retirement. In order to make the system function effectively, it may be appropriate to have a Committee of legal experts presided by a retired Judge to give their imprimatur to  the settlement so that such apprehensions do not come in the way of arriving at a settlement. It is our pious hope that a serious thought would be given to the aspect of dispute resolution amicably, more so in the post-COVID period.

      9. In most countries, mediation has proved to be an efficacious remedy and here we are talking about mediation inter se the Government authorities or Government departments. India is now a signatory to the Singapore Convention on Mediation and we understand that a serious thought is being given to bring forth a comprehensive legislation to institutionalise mediation, in furtherance of this function to which India has committed itself.

      Postscript 2:

      10. We now turn to the issue of matters pertaining to CPSEs and Government authorities insofar as taxation matters are concerned,  because they are consistently sought to be carved out as a separate category of cases. One of the largest areas of litigation for the Government is taxation matters. The petition rate of the tax department before the Supreme Court is at 87%. - See ‘Economic Survey 2017-19 – Volume 1’ by the Department of Economic Affairs, Ministry of Finance, Government of India So, the question is can something be done about it?

      11. In our opinion, a vibrant system of Advance Ruling can go a long way in reducing taxation litigation. This is not only true of these kinds of disputes but even disputes between the taxation department and private persons, who are more than willing to comply with the law of the land but find some ambiguity. Instead of first filing a return and then facing consequences from the Department because of a different perception which the Department may have, an Advance Ruling System can facilitate not only such a resolution, but also avoid the tiers of litigation which such cases go through as in the present case. In fact, before further discussing this Advance Ruling System, we can unhesitatingly say that, at least, for CPSEs and Government authorities, there would be no question of taking this matter further once an Advance Ruling is delivered, and even in case of private persons, the scope of any further challenge is completely narrowed down.

      12. It is as far back as in 1971 that a report was submitted by the Direct Taxes Enquiry Committee under the Chairmanship of Dr. K.N. Wanchoo, recognising the need for providing Advance Ruling System, particularly in cases involving foreign collaboration. The aim was to give advance rulings to taxpayers or prospective taxpayers, which would then considerably reduce the Revenue’s workload and decrease the number of disputes. This finally resulted in a scheme of Advance Ruling being brought into effect in 1993, with the introduction of a new Chapter in the Income Tax Act, 1961 (hereinafter referred to as the ‘IT Act’). A quasi-judicial tribunal was established as the Authority for Advance Rulings (for short ‘AAR’) to provide certainty and avoid litigation related to taxation of transactions involving non- residents. The scope of the transactions on which an advance ruling can be sought from the AAR has gradually increased to now include both residents and non-residents, who can seek the same for issues having a substantial tax impact. Chapter XIX-B of the IT Act deals with advance rulings and it has been defined in Section 245N(a) of the  IT Act. These rulings are binding both on the Income Tax Department and the applicant, and while there is no statutory right to appeal, the Supreme Court has held in Columbia Sportswear Company v. Director of Income Tax Bangalore [2012 (8) TMI 105 - Supreme Court]  that a challenge an advance ruling first lies before the High Court, and subsequently before the Supreme Court. The advance ruling may be reversed in the event a substantial question of general public importance arises or a similar question is already pending before the Supreme Court for adjudication.

      13. The ground level situation is that this methodology has proved to be illusionary because there is an increasing number of applications pending before the AAR due to its low disposal rate and contrary to the expectation that a ruling would be given in six (6) months (as per Section 245R(6) of the IT Act), the average time taken is stated to be reaching around four (4) years!- See Deloitte Report on Advance Rulings in India: Delivering Greater Tax Certainty (Deloitte Tax Policy Paper 5, 2019)  There is obviously lack of adequate numbers of presiding officers to deal with the volume of cases. Interestingly, the primary reason for this is the large number of vacancies and delayed appointments of Members to the AAR. ibid In view of the time taken, the very purpose of AAR is defeated, resulting in the mechanism being used infrequently as is evident from the ever- increasing tax related litigation.

      14. We may notice a significant development in Section 245N of the IT Act. It was through Notification No.11456 dated 3.8.2000 that public sector companies were added to the definition of ‘applicant’, and in 2014, it was made applicable to a resident who had undertaken one or more transactions of the value of ₹ 100 crore or more.

      15. Insofar as a resident is concerned, the limit is so high that it cannot provide any solace to any individual, and we do believe that it is time to reconsider and reduce the ceiling limit, more so in terms of the recent announcement stated to be in furtherance of a tax friendly face-less regime!

      16. We may refer to the international scenario where there has been an incremental shift towards mature tax regimes adopting advance ruling mechanisms. The increase in global trade puts the rulings system at the centre-stage of a robust international tax cooperation regime. The Organisation for Economic Cooperation and Development (for short ‘OECD’) lists advance rulings as one of the indicators to assess trade facilitation policies, making it an aspirational international best practice standard. For example, Australia and New Zealand have a robust system of advance rulings wherein the decisions (which are public rulings affecting a large number of taxpayers) are given teeth by being made binding on the revenue authorities. New Zealand has gone a step further and innovated “status rulings” under which a taxpayer can apply to the Commissioner for a ruling on how a change in the law impacts an existing ruling.

      17. In the United States, there is a mechanism for the Treasury to authorise guidance in the form of revenue rulings, procedures and notices. The mechanism again, has been bolstered by subsequent practice and interpretations of the United States courts, where rulings have indicated that taxpayers may be penalised if they act inconsistently with legal interpretations set out in the revenue rulings, procedures or notices.

      18. Tax transparency has been a hallmark trait of the Swedish legal system. Swedish law requires public disclosure of ex ante tax administration such as advance rulings. Both the taxpayer as well as the Swedish Tax Agency can request an advance tax ruling, these rulings are published without information identifying the taxpayer that requested them. The Skatterättsnämnden, or the Council for Advance Tax Rulings is the Swedish Government agency which is vested with this power. The advance ruling system has played a crucial role in Sweden’s position as a country with one of the highest tax compliance rates in the world.

      19. The aim of any properly framed advance ruling system ought to be a dialogue between taxpayers and revenue authorities to fulfil the mutually beneficial purpose for taxpayers and revenue authorities of bolstering tax compliance and boosting tax morale. This mechanism should not become another stage in the litigation process.

      20. We, thus, consider it appropriate to recommend to the Central Government to consider the efficacy of the advance tax ruling system and make it more comprehensive as a tool for settlement of disputes rather than battling it through different tiers, whether private or public sectors are involved. A council for Advance Tax Ruling based on the Swedish model and the New Zealand system may be a possible way forward.

       


      Full Text:

      2020 (9) TMI 496 - Supreme Court

      Topics

      ActsIncome Tax