After clearing the air on past cases of Minimum Alternate Tax (MAT) on foreign portfolio investors (FPIs), Finance Minister Arun Jaitley on Thursday said the government would soon try to resolve all pending tax disputes. Also, that pending reforms such as on expeditious arbitration and a bankruptcy code would be got through to enable the economy to withstand turmoil in global markets. However, he admitted to political difficulties in Rajya Sabha passage of the Constitution amendment on a goods and services tax (GST). ALSO READ: Arun Jaitley to visit Singapore, Hong Kong to woo investors He acknowledged the regulatory system had to be prepared for much faster change, in an environment where there was turmoil “by the day”. Addressing a gathering of investors at the India Economic Convention, organised by the International Chamber of Commerce and India Foundation here, he said funds had to be shifted to small entrepreneurs in the unorganised sector to generate jobs. The big private players were grappling with their own problems. “A number of taxation issues have been put to rest. Our pending (tax) disputes...we are trying in the next few days to put (these) to sleep,” he said. The government had taken a number of steps to lend certainty to taxation policies. It had earlier decided not to challenge a high court verdict in favour of Vodafone over share transfer within a group and instructed tax officials not to pursue similar cases. Recently, it accepted the A P Shah committee report on past MAT cases on FPIs. It will introduce amendments to the Income Tax Act in Parliament’s next session. Meanwhile, all earlier notices to FPIs would be put on hold. The finance ministry has also decided to expedite adjudication of 532 cases involving a total service tax demand of Rs 38,000 crore. These are in the insurance, civil aviation and consumer durables sectors, among others, in Delhi and Mumbai.

The aim is to bring these to closure by the end of next month. It has also started manual scrutiny of small service taxpayers. Among the companies facing service tax adjudication are Jet Airways, Kingfisher Airlines and Sony. There are tax demands of Rs 280 crore on Jet, Rs 370 crore on Kingfisher and Rs 268 crore on Sony. An adjudication order has already been passed against Tata AIG for Rs 248 crore. The move is among the first tasks initiated under the newly-formed directorate of taxpayer services under the Central Board of Excise and Customs, set up to simplify and improve customer experience. It was set up in line with the recommendations of the Tax Administration Reforms Commission, headed by Parthasarathi Shome. Jaitley on Thursday also attacked Bihar CM Nitish Kumar and his ally and Rashtriya Janata Dal chief Lalu Prasad for destroying Ram Manohar Lohia’s legacy by aligning with the Congress for Bihar polls and failing to develop the state in the last 25 years when they were in power.

Assurances, priorities

Apart from GST, the minister said other pending reforms such as on the bankruptcy code, dispute resolution in major contracts, an expeditious arbitration process and a public arbitration law would be carried out. "Many reforms (are) in the pipeline," he said.

Through these, he said, the government was trying to make the economy's fundamentals strong enough to check turmoil such as seen at present in the global markets.

On change in 'ease of doing business' he said it was work in progress. "Today, there is no sector of economy which is saying I am being harassed. The procedures have been rationalised. But, then, the entire regulatory and other systems have to prepare themselves much faster for this change."

He underlined the need for boosting the manufacturing sector and giving a boost to small and medium enterprises, for generating more jobs. The efforts include increasing public investment and streamlining the foreign direct investment regime.

"Kick-starting our manufacturing sector and its growth rate... is one of the various challenges to the Indian economy today. If we can handle that problem, its ability to absorb a number of people coming from rural India and adding to India's growth story is going to be much larger," Jaitley said.

Recalling the recent World Bank study on ranking of states for ease of doing business, Jaitley said there was no doubt of Gujarat emerging on top but what was also noteworthy was the good ranking of Jharkhand and Chhattisgarh and their efforts to attract investment.

There is clarity about the direction in which the economy has to move, he said, adding that the ministers work with the full backing of the Prime Minister, who unquestionably has "the last word".

FM to woo Singapore, Hong Kong investors

Finance Minister Arun Jaitley will reach out to investors and hold talks with leaders in Singapore and Hong Kong during his four-day visit, beginning Friday.In Singapore, Jaitley will give a talk on 'India: A haven of opportunity in globally challenging times' and meet Prime Minister Lee Hsien Loong and other leaders of the city nation, the finance ministry stated.

He would attend meetings with prominent investors and fund managers in Singapore, including Temasek and GIC, the Singapore-government owned wealth funds.

He will have talks with pension funds regarding their participation in the National Investment & Infrastructure Fund being promoted by the Indian government, it said.

Jaitley is scheduled to address a meeting of Singapore businesses, jointly organised by our high commission there and business chamber Ficci.

After two days in Singapore, Jaitley will reach Hong Kong on Sunday. He will address the Capital Markets and Institutional Investors Summit on Monday. He will have meetings with the Hong Kong Trade Development Council, Greater China Chamber of Commerce and fund managers.