International Fiscal Assn. to expand activities in India

By R. Gopalakrishnan

CHENNAI, AUG. 12. The India Branch of the Rotterdam (Netherlands)-based International Fiscal Association (IFA) is set to expand its activities with the inauguration of its southern regional chapter here on Saturday.

The IFA India Branch, founded in 1983, already has a regional chapter in Mumbai. The establishment of the southern regional chapter is taking place when issues like transfer pricing of cross-border transactions, taxation of expatriate income, interpretation of double taxation avoidance agreements and taxation of e-commerce are emerging as major issues in India and are posing a challenge to tax payers and advisors.

Addressing the inaugural function, Mr Om Prakash Dani, chairman, IFA India Branch, and Mr O. P.Vaish, honorary president who was chairman for 13 years, emphasised that the IFA was not a lobbying organisation but one that promoted research and problem-solving in fiscal matters with the active involvement of government officials, taxpayers, practitioners and academicians. Government organisations and officials were subscription paying members of the IFA just as corporates and individuals.

The Indian branch had among its corporate members the Central Board of Direct Taxes, Authority for Advanced Ruling, National Institute of Public Finance and Policy, RBI, Department of Legal affairs (Ministry of Law, Justice and Company Affairs), the Supreme Court and High Courts. The branch, which hosted the 51st IFA Congress in New Delhi in 1997, was now looking forward to playing an active role in the current year's IFA Congress to be held at San Francisco.

The congress, scheduled for September 30 to October 5, would be devoted to the two themes, ``taxation of income derived from electronic commerce'' and ``limits on the use of low-tax regimes (tax havens) by multinationals: current measures and emerging trends''. The India Branch of the IFA was already represented in the executive committee and scientific committee of the IFA, which has members from 100 countries having links through 45 national branches or through direct membership where there were no national branches.

Mr. Vaish advised IFA members in India not to support blindly either the OECD model of taxation or the UN model but to fight for models that served the interests of developing countries.

Mr. Dani (of Modicorp) said the IFA India Branch had decided to establish an Internationl Tax Academy for which land had been sought in NOIDA in the National Capital Region. Preparation of material for study courses and research projects was on, with the founder of the NIPFP, Dr. Raja J. Chelliah, heading the academy.

Inaugurating the southern regional chapter, Mr. S. Viji, Vice- Chairman, Sundaram Finance, said the latest trend of multinationals treating intangibles like human resources and intellectual property as assets and fixed assets as liabilities was a phenomenon that needed to be studied.

Dr. Chelliah said the Tax Reforms Committee (headed by him) had recommended not only the imposition of service tax but also the integration of service tax with VAT once the list of services to be taxed was expanded. In the past few years, the purview of service tax had been widened but integration had not been effected. IFA members should study issues involved in integration of the Central sales tax (CST) and State-level VAT besides service tax, he said.

Mr. G. Narayanaswamy, president of the southern regional chapter, cautioned against motivated and misleading valuation of intangibles for the sake of stock price manipulation.

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