Tag: Kapil Sibal

What exactly does Ramdev want?

On Friday, the government released a six-page document of compromises it has reached with Baba Ramdev on the issue of illegal money. It answers accusations that the government went out of the way to placate him. The document also shows that the government does not have contempt for the issues Ramdev has raised.

The document shows that the government has readily accepted Ramdev’s demand to bring a Public Services Delivery Bill in Parliament at the earliest. It is also .We are ready to declare black money stashed abroad as national wealth, says HRD Minister Kapil Sibal.

Watch Video.

http://zeenews.india.com/video/showvideo11806.html

RAMDEV ANNOUNCES VICTORY 
Govt to declare black money as national wealth.

http://zeenews.india.com/video/showvideo11805.html

The Document.

Action Taken by Government on Demands Raised by Baba Ramdev Recovery of Black Money
There is a legal framework regulated by the Reserve Bank of India for the opening of bank accounts
overseas by Indian residents and for outward or inward remission of funds through authorized
channels.
The existing legal framework for dealing with illicitly generated funds transferred overseas and
measures for the attachment and repatriation of such illegal assets to India and provision for
penalties for offenders are:
A. Under the Prevention of Money Laundering Act, 2002 (PMLA), money laundered out of
predicate scheduled offences can be attached and seized and individuals and other legal entities
found to have indulged in money laundering can be prosecuted. PMLA provides for imprisonment
of minimum of 3 years (which can be extended up to 7 years) and a fine of up to Rs.5 lakh and the
tainted proceeds parked overseas can be recovered through Mutual Legal Assistance Treaties. India
has such treaties with 26 countries.
B. Under the Foreign Exchange Management Act, 1999 (FEMA), cases relating to contravention in
foreign exchange transactions by Indian residents can be adjudicated with penalty up to a maximum
of 3 times the amount involved. Further, FEMA empowers the confiscation of the amounts lying
abroad and directing their repatriation.
C. Under both statutes (FEMA and PMLA), investigation is taken up against specific persons, both
natural and legal, and on the basis of specific information.
D. Section 105A of the Cr. PC provides for reciprocal arrangement and procedure for attachment
and forfeiture of properties generated from the commission of an offence. Where such properties are
situated overseas and treaty arrangements exist between Government of India and the other country,
Letter Rogatories can be issued to a court / authority of the other country for execution of such an
order.
E. Under the Income Tax Act also, income earned and not disclosed is taxable and also subject to
penalty and interest, as well as prosecution. The amount recovered may even exceed the entire
undisclosed income. This is in effect confiscation of such income / property.
Actions at hand
I. India has negotiated / renegotiated Double Tax Avoidance Agreements and finalized Tax Information Exchange Agreements with 44 countries so as to strengthen the exchange of
information relating to tax evasion, money laundering and other criminal / illicit activities.
II. Agencies enforcing these laws have been strengthened and action is being taken in all cases
where credible information is available. In the last two years, over Rs 33,000 crore of mispricing
has been detected in international trade and over Rs 30,000 crore of tax evasion detected
domestically.
III. Government has commissioned a study, to be completed within 18 months, by three nationallevel
institutes to assess the extent of black money inside and outside the country and its impact on
national security. The study will also indicate the sectors and mode of generation of black money
and recommend measures for its prevention and control.
IV. The Direct Taxes Code Bill, as introduced in Parliament, contains provisions for mandatory
declaration of assets held abroad by taxpayers in India. It also contains provisions such as General
Anti Avoidance and Thin Capitalization Rules to combat illicit transfer of money and assets abroad
through complex financial arrangements and instruments.
V. A Directorate of Criminal Investigation has been created in the Central Board of Direct Taxes as
a dedicated unit to track financial transactions relating to illegal / criminal activities and bring such
activities to justice.
VI. A High Level Committee has been constituted under the Revenue Secretary for effective sharing
of information among Law Enforcement Agencies for coordinated investigation / prosecution of
economic offences.
Mauritius Treaty
1. A Joint Working Group (JWG) was constituted in 2006 for the purpose of renegotiating the Direct
Taxation Avoidance Convention with Mauritius and its last meeting was held in 2008. Thereafter,
India has successfully used the mechanism of the Peer Review Group (PRG) of the Global Forum
for Transparency and Exchange of Information for Tax Purposes – of which India is Vice Chair – to
leverage arguments with the Mauritian side to be more open in furnishing tax related information to
India.
2. Recently, during the visit of President of Mauritius in end-April, an indication was received that
Mauritius would resume the Joint Working Group dialogue on the DTAC. Further, Foreign Minister
of Mauritius has conveyed that his government will give a fresh mandate for the resumed
negotiations to their experts. This position has been further confirmed by the Prime Minister of
Mauritius to the Indian Minister of State for External Affairs on 16th May 2011 during her visit to
Mauritius.
3. Hon’ble Supreme Court in the case of Azadi Bachao Andolan Vs Union of India (2003) endorsed
the Mauritius route for investments into India for availing of the capital gains tax exemption.
Hence, any change in the law relating to Mauritius can only have prospective application and can be
in respect of future holdings/accounts/entities in Mauritius.
Proposed Action
In order to strengthen existing laws relating to black money, the government has constituted a
Committee to consult all stakeholders and submit its report within a period of six months. The
Committee will examine the measures to strengthen the existing legal and administrative
framework to deal with the menace of generation of black money through illegal means
including, inter alia,
a) Declaring wealth generated illegally as national asset;
b) Enacting / amending laws to confiscate and recover such assets; and
c) Providing for exemplary punishment against its perpetrators.
Any further suggestions in this regard will be duly considered.
http://www.tehelka.com/channels/Web_Specials/2011/June/04/images/Gov_Response_to_Baba_Ramdev.pdf