Quote on Pre-Budget Expectation Inputs - Foreign investors in India by Prashant Bhojwani, BDO India
Below the Quote on Pre-Budget Expectation Inputs - Foreign investors in India by Prashant Bhojwani, BDO India
Two of the biggest asks of foreign investors in India are tax certainty and a reduced timeline for litigation. Earlier, the Authority for Advance Rulings (AAR) provided binding rulings that offered clarity and assurance to taxpayers and the tax department alike. This was one avenue to provide tax certainty to foreign investors. It is time to strengthen the framework of the Board for Advance Rulings and re-introduce the binding nature to provide much-needed certainty from a tax perspective to foreign investors.
Currently, the maximum appeals are pending at the Commissioner (Appeals), the first appellate authority, with approximately 5.49 lakh appeals pending on April 1, 2024 (out of which 3.01 lakh appeals were filed before April 1, 2022) which does not read very well on India’s scorecard. The number of Commissioner (Appeals) needs to be increased to adjudicate pending appeals in an accelerated manner. A strict timeline (say 9 or 12 months) should be introduced to dispose of the appeals, similar to dispute resolution panel timelines. Both the above measures will enhance foreign investor confidence, positioning India as a preferred destination for doing business.
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