Retrospective changes in tax law bad, says new CII chief Adi Godrej
23 April 2012
Adi Godrej, chairman of the Godrej Group and the new president of the Confederation of Indian Industry (CII), has said a strong corruption watchdog on the lines of the proposed lokpal is crucial to check misgovernment and make the government accountable for its actions.
''Our theme for this year is reviving growth, which can be achieved through reforms and governance. Some kind of Lokpal bill is required to achieve all this,'' Godrej said.
In interviews to several publications over the weekend, he also came out strongly against the proposals in the annual union budget for retrospective amendments to the Income Tax Act and the General Anti-Avoidance Rules (GAAR). The retrospective aspect of the change in tax laws has already drawn widespread criticism from multinationals and foreign government officials; and threatens to derail foreign direct investment in India.
''We (CII) have made it very clear to the government that aside from any effect on taxation, these proposals have created a negative perception about India and that is not good. Overall, we need more investment, higher growth. I am hoping the issues will get resolved,'' he said.
''Retrospective is bad. GAAR has to be carefully applied ... avoidance is a difficult term to define. There are GAAR provisions in many countries, but they must be sensible provisions. The GAAR provisions will create a lot of difficulties for investments in India,'' he added.
Godrej more than agreed with a recent statement by Rahul Bajaj, his predecessor as CII chairman, that tax authorities had draconian powers which were often used unfairly. ''This is totally unacceptable. It is against the Constitution, to my mind. We have taken it up with the finance minister,'' he said.