By IANS,
New Delhi: Prime Minister Manmohan Singh Thursday discussed with his cabinet colleagues how to bring back black money stashed abroad, a day after the Supreme Court queried why the government cannot name those involved in this $1.5-trillion “national plunder”.
The discussion came against the backdrop of the apex court coming down heavily on the government’s reluctance to provide full information on ill-gotten money stashed away by Indians in foreign banks.
“Our government is committed to bring all that money and find out the truth. But there is some process involved,” Defence Minister A.K. Antony told reporters after the cabinet meeting, asserting that there will no cover-up on the matter. “We have already made up our mind.”
A finance ministry official said India has also started renegotiating its tax agreements with several countries in an effort to track ill-gotten money stashed in tax heavens such as Switzerland.
“There are issues of how we capture data in each country. Each country has a different system of capturing data. That has to be brought on a standardised platform,” said a spokesperson for the Central Board of Direct Taxes (CBDT).
He said a process of exchange of information among governments has started and was still developing. “Here is a meaningful exchange of information and the process to develop a robust tax regime has started.”
Left parties, however, stressed they will oppose any move for a tax amnesty scheme to bring back black money. “Much of this money has been taken out of the country illegally. So thre is no question of an amnesty,” said Communist Party of India (Marxist) general secretary Prakash Karat, giving out bis reaction to the media persons here.
The prime minister made it clear Wednesday that information on black money stashed in tax havens abroad cannot be made public since it would entail violation of India’s treaty obligations with other countries and jurisdictions.
“The information will not be made public. It will be a violation of treaties,” Manmohan Singh told reporters after a cabinet reshuffle Wednesday when asked about his stand on black money abroad.
“There is no instant solution to bring back what is called black money. We have got some information and that has been provided to us for use in the collection of taxes.”
The matter came up before the apex court after noted lawyer Ram Jethamalani sought directions to the union government to act upon a report that Germany was willing to share details of Indians having accounts in banks based in Liechtenstein.
Jethamalani wanted the directions to be given to the government to bring back such ill-gotten money, estimated at a whopping $1.5 trillion – nearly one-and-half times India’s gross domestic product – put away in foreign banks by Indians.
“It is not a case of tax. The issue involved is of serious nature. Keep aside all the things. Let us consider the persons named,” said the apex court bench of Justice B. Sudarshan Reddy and Justice S.S.Nijjar.
The finance ministry in its status report during last hearing of the case said there were 12 trusts owned by 26 tax assesses, which even include non-residrnt Indians, that hold accounts in the Swiss and German banks in Liechtenstein.
There are 15 banks in Liechtenstein, of which seven are Swiss-owned. The principality, with an area of about 160 sq km, is surrounded by Switzerland and Austria and has a total population of 67,000 people.
Finance Minister Pranab Mukherjee had maintained in the past that India has followed the guidelines laid down by the Organisation of Economic Cooperation and Development (OECD) and signed independent treaties with a host of countries and territories.
He has also said these treaties were meant to share information on illegal transfers, often referred to as black money, but cannot be disclosed even to parliament, let alone the Directorate of Enforcement because of the secrecy code.
Bharatiya Janata Party (BJP) president Nitin Gadkari has said the union government’s reluctance to disclose the names of Indians with ill-gotten money parked abroad raised suspicions about it and the government should make the names public.