By TIOL News Service

NEW DELHI, APR 06, 2015: WHILE speaking at the Annual Session of the CII, the Union Finance Minister, Mr Arun Jaitley, said, Legitimate taxes must be paid and should not be perceived as 'tax terrorism'.

Elaborating on this, he clarified that while pursuing tax-related cases, the fairness of the Government has been partly misunderstood and stressed that while India does not practice tax terrorism, it is not a tax haven either (he said so probably in the background of recent reports on the levy of MAT on capital gains earned by FIIs).

The aim of the Government, he said, is to create a conducive business environment by addressing the challenges faced, especially with respect to taxation, the Land Acquisition and Rehabilitation and Resettlement bill, and corruption.

Reflecting on the last ten months, Mr Jaitley said, that in order to address the most important challenge of restoring India’s credibility, the Government decided to open up the economy even further and raised the FDI limit across several sectors. However, while that would enable investments, it was critically important to create a conducive business environment, with a special focus on ease of doing business.

To facilitate ease of doing business, the Government is focusing on tax reforms with the aim of pushing for the implementation of the Goods and Services Tax (GST) and lowering the corporate tax rate. With respect to the land law, which is commonly perceived as anti-farmer and detrimental to the cause of rural India, the Minister said the Government was cognizant of the large population that would get impacted, but was also aware of the potential of this to unleash productivity and employment. Amendments in the Land Acquisition and Rehabilitation and Resettlement bill are required to support building of rural infrastructure including roads, irrigation and industrial corridors.

Speaking on the issue of corruption, the Minister said that it was imperative to distinguish between a corrupt act and an honest mistake in order to support fair and fearless decision making.

The road map, he stressed, is very clear and the Government will do its share by creating a policy framework that enables economic growth. The time now, he said, is to slog to implement the changes at the ground level, and the Minister sought the industry’s support in implementing these changes.