It may well be impossible to get information on black money stashed away in foreign banks and tax havens.
Mr Sunil Mitra, Union Finance Secretary, has said that all the upcoming agreements with about 87 countries could get the country access to information only prospectively.
Referring to double tax avoidance agreement with Switzerland, he said there was no possibility to get retrospective information from that country.
Citing a US study, he said about $20 billion illicit money went out of India every year. About 70 per cent of such outflows happened because of trade-based under invoicing. Tax authorities had identified Rs 34,000 crore as mispriced last year.
“We have to establish criminality and violation of law (to brand that as black money). This money is in foreign banks which have their own laws of confidentiality,” he said.
Addressing reporters here on Friday, he said the country identified 87 countries for having information exchange treaties to tackle black money problem. “Of them, 50 have been finalised in the last 18 months. These need to be ratified by respective legislatures,” he said.
Mr Mitra was here to deliver a lecture on ‘Tax reforms in India' at Administrative Staff College of India (ASCI).
With regard to signing an information exchange pact with Mauritius, he said it had declined to talk earlier on a possible treaty saying it had no mandate to do that. “They now agreed to talk the treaty. We will see how this shapes up,” he said.
IT refunds
Mr Mitra had said that he had never said that Income Tax refunds should be slowed down or stopped. The CBDT had refunded Rs 41,000 crore in April-May 2011 as against Rs 74,000 crore in 2010-11. After the payout, the net gain was Rs 10,000 crore, forcing the Government to borrow at high interest.
“Hence we need to moderate refunds. Our aim is to pay the remaining Rs 64,000 crore this financial year so that we will have a clean slate when Direct Tax Code regime comes in,” he said.
Total collection this year up to June 15, 2011, stood at Rs 75,521 crore, 27.3 per cent more than comparable period last year. “If the trend continues, we can payback the dues,” he said.