Domestic players warned against misuse of double taxation pact

By Our Economy Bureau | 29 May 2004

New Delhi: Finance minister P. Chidambaram, yesterday warned domestic players against misuse of ''Double Taxation Avoidance Agreements (DTAA).'' "DTAA treaties are well-established instruments. If a case of misuse arises, then it must be stopped. There is no reason to apprehend that the DTAAs would go. The misuse is not by a foreign investor, but by some Indians,'''' Chidambaram said at a press conference called to explain the economic agenda of the United Progressive Alliance''s (UPA) Common Minimum Programme (CMP).

The finance minister said that he would be visiting Mumbai to remove apprehension from the minds of FIIs and Indian industry.

"Early next week, I will visit Mumbai to meet SEBI, FIIs and representatives of industry. I will carry the commitments made under CMP to them and answer any lingering doubts,'''' he said.

On the imposition of cess on central taxes to fund education, Mr Chidambaram said that he did not see it as a ``bitter pill'''' and maintained that the doctrine of proportionality would be applied. "The doctrine of proportionality will be applied. The burden of cess will fall on those who can bear the burden,'''' he said.