New Delhi: Finance Minister Arun Jaitley on Tuesday said the government will press ahead with Rs 40,000 crore tax demand on foreign institutional investors as FIIs lost a case against levy of tax on capital gains they made.
"FIIs went to a tribunal, which is called Authority for Advance Rulings (against levy of 20 per cent Minimum Alternate Tax on capital gains). They got a judgement against themselves.
"So, the tribunal has decided against them. The amount involved is Rs 40,000 crore. I can change the face of India's irrigation with that Rs 40,000 crore," he said.
The BJP government, Jaitley told NDTV, has abolished the MAT from April 1, 2015, but the demands pertain to tax related to earlier period and they wanted it to be waived.
"To which I responded and said 'we are reasonable, so for the future I have waived it. But the tax demand after winning the case, if I waive off, we will be like a tax haven ....how would be I answerable to Parliament that after the case I just waive Rs 40,000 crore," he said.
On multi-billion dollar tax demands on Cairn Energy Plc of UK and Cairn India, Jaitley said the tax assessment orders were passed in January 2014 and demands were follow-up related notices.
"Since they are entitled to challenge (notices) in court, we will see what the courts decide," he said. Talking about the initiatives taken by the new government, Jaitley said in the last one year no retrospective tax law has been brought and "not a single new notice has been issued. My only problem is with regards to legacy issues that I inherited from the previous government".
Arun Jaitley also expressed hope that the bill for introduction of Goods and Services Tax (GST) will be passed in the coming session of Parliament. He sounded confident that the new indirect tax regime would be put in place from April 1, 2016.
Jaitley said the GST will be the 'single biggest' tax reform since independence. On the land bill, he said 'Sonia Gandhi's land bill' will keep rural India poor perpetually. He said the law passed by the UPA government says that land cannot be acquired for rural infrastructure.
The Finance Minister said the his government's amendment to the land will help rural India. He also said the government was ready to accommodate good suggestions made by the opposition on the land bill. Asked about comments made by Minister of State for Foreign Affairs V K Singh, Jaitley said in his personal opinion the former Army chief should not have used the word 'presstitute' for media persons.
On the Rafale jet deal, Jaitley sought to defend it saying 'cheapest is not the best' when it comes to national security. "The government has to be decisive. We are going for Rafale because we earlier picked it up... It's a sign of political decisiveness," he said. On why the government was opting for an expensive aircraft, he told NDTV, "...cheapest is not necessarily the best. On areas like defence ... you have to look in terms of entire quality."
Jaitley said because of the indecision of the previous government, the armed forces remained under equipped for almost a decade.
"It took you 10 years to decide how much FDI (should be allowed) in insurance. It takes you 10 years to decide which aircraft to provide to our fighter pilots. Therefore a large nation state like India cannot survive on this pace of decision making. Therefore you have to come out with clear decisions," he said. On whether it was against the concept of 'Make In India', Jaitley said, "I can make in India the Rafale jets after 20 years that does not mean I keep the army ill equipped for next 20 years."
Jaitley further said that the government has allowed 49 per cent FDI in defence which would encourage manufacturing of equipment within the country. "We took a decision (on allowing FDI in defence) and now you have joint ventures of Indian companies (like Mahindra, Tata and ADAG). They are getting into defence manufacturing with 49 per cent international partners who are transferring technology," he added.