NEW DELHI: The Supreme Court on Tuesday (28.10.2014) has directed the Centre to reveal the names of all the Indians who hold foreign bank accounts by Wednesday.
Rapping the government for seeking modification of its order on black money on disclosing the names of Indians who hold accounts in foreign banks, the apex court refused to change its earlier order to exempt the government from not disclosing the names where criminality is not found.
My Views: Supreme Court has asked the government Today to reveal the names of all Indians who hold accounts in foreign bank. Media men and persons like Arvind Kejriwal term the list as Black List. Opponents of BJP are putting pressure on the government for disclosure of all names.
I am of the view that until it is not proved that the money parked in foreign banks by any Indian is illegal and black , it will be improper and inappropriate to disclose their name . It is open secret that lacs of Indians who are in job at foreign centres or are doing business with foreign countries are having account abroad. And as per established practices all over the world, accounts of all are kept secret until it is proved in court that the money in account is bad in nature as per law of the land.
Read My Views In detail By Clicking On this Link
What is Black Money trail ? : -Business Standard--When Is A Foreign Bank Account Illegal?
A person residing in India is allowed to open a bank account in a foreign bank if she/he has to engage in any current or capital account transaction and remit money to or from India, under the Foreign Exchange Management Act (Fema), 1999. Under the Liberalised Remittance Scheme, an Indian resident can open a foreign bank account and remit money from India for any permitted current or capital account transaction, only up to a specified limit within a financial year.
Further, a resident of India, who was a non-resident Indian earlier and had opened a foreign bank account at that time, can continue to hold and maintain it even after returning to India. Fema provisions allow such a person to use foreign bank accounts for any purpose, without any monetary limits.
Kishore Joshi, senior associate at corporate law firm Nishith Desai Associates, says in normal course, a resident Indian isn't allowed to open a bank account in a foreign country. If the account in a foreign bank has income undisclosed to income tax authorities, or has funds from illegal sources, the account can be declared illegal, under the Fema. The penalty for contravention of the Fema provisions could be up to three times the amount involved. In case the amount cannot be quantified, the penalty imposed could be up to Rs 2 lakh. According to Fema provisions, in addition to the penalty, any currency, security, money or property involved in the contravention could be confiscated.
Lalit Kumar from corporate law firm J Sagar Associates says if funds deposited in a foreign bank result from any activity considered illegal, the act is treated as a criminal offence.
Black Money Disclosure May Prove Costly For Banks. -Business Standard
Indian financial institutions face the risk of sanctions by the US, under the Foreign Account Tax Compliance Act (Fatca) - the new anti-tax evasion law in the US, - if the Supreme Court directs the Centre to disclose information about foreign accountholders even without the launch of prosecution into these.
This will be a breach of existing treaties; India might not be able to commit to confidentiality in new tax pacts with other countries.
As India is racing against time to sign Fatca by December 31, the apex court's May 1 judgment, directing the government to share documents in eight cases in which investigation hadn't found evidence of tax evasion, has put the finance ministry in a bind.
On October 16, it filed an application, seeking clarity on whether the court's order would forbid the government from entering into any treaty with a clause on maintaining confidentiality of information received. The clarification is essential for India to commit to its current and prospective treaty partners that the information received will be used only for tax purposes and can be disclosed in public court proceedings only after prosecution for tax evasion is filed.
If the apex court clarifies it has barred the government from doing so, India won't be able to sign the Fatca, as well as other tax treaties under international standards.
"For Fatca and many international tax treaties, we need the approval of the court. If it doesn't allow maintaining the confidentiality, we can't share information under these agreements and Indian banks will face the consequences," a finance ministry official said on condition of anonymity.
Under Fatca, all foreign financial institutions have to share information on American taxpayers. If India fails to sign the Fatca, Indian financial institutions will become non-compliant, subjecting these to "a regressive" 30 per cent withholding tax and exclusion from US markets.
"The requirement to sign the Fatca is fairly stringent and non-negotiable. Most countries have signed it. Indian financial institutions operating in the US might suffer a backlash because they are required to comply with the US law," said Vidya Rajarao, partner (forensic services), Grant Thornton India LLP.
On Monday, the government told the apex court non-sharing of information would hamper India's efforts to secure details of tax evaders with illegal accounts abroad. The new global standards on automatic exchange of information, which can help tackle the issue of black money, have the same confidentiality requirements.
While India has, for years, been struggling to get information from tax havens about its residents who stashed black money abroad, as many as 50 countries, including Switzerland, Cayman Islands, Luxembourg and Mauritius, have agreed to give information about US tax evaders. The US will also reciprocate by sharing information about taxpayers of these countries.
According to officials, if India doesn't sign the Fatca, no US company will find it attractive to invest in India due to withholding tax. On April 11, the US Treasury had said it had reached an agreement "in substance" with India on the Fatca. However, it was only a draft agreement between senior officials of the two sides and will have to be approved by the Indian Cabinet.
http://www.business-standard.com/article/current-affairs/black-money-disclosures-may-prove-costly-for-banks-114102800036_1.html
How much black money do Indians have abroad?-India Today
Even as the Indian government on Monday took the first real step towards getting back black money, or undeclared wealth allegedly stashed away by Indians in overseas accounts, by naming three such people in the Supreme Court, what is the actual quantum of such funds being talked about is not clear.
Despite some official White Papers, or government reports, on black money tabled in the past, only unofficial estimates by independent agencies are floating around. The variations are also rather wide.
One figure that is often quoted came from senior BJP leader L.K. Advani, who was India's deputy prime minister and home minister during the regime of the National Democratic Alliance (NDA) till 2004. Advani, as a key opposition leader, had said in 2011 that some Rs.28 lakh crore (around $466 billion) was stashed away illegally in bank accounts overseas.
He said he was using a study by Global Financial Integrity, a Washington-based non-profit firm that does research and advocacy on illicit financial flows, for his estimate. Advani also said the names of 782 alleged Indians with illegal overseas accounts - that have not been declared with the Indian government and hence no taxes paid on them - were not being disclosed.
Advani's own party in 2011 had estimated the black economy at between $500 billion and $1.4 trillion.
In the Government of India's White Paper presented in parliament in 2012, the total deposits of Indians in all Swiss banks was around $2.1 billion -- nowhere even near the lowest estimate of $466 billion.
In fact, there were also reports quoting a so-called report of the Swiss Banking Association in 2006, as per which black money of Indians overseas was placed at $1.46 trillion. But these reports were subsequently denied by Swiss authorities. The Swiss Bankers' Association said it never published such a report.
It will be worthwhile, however, to revisit the May 2014 report of Global Financial Integrity, which took note of the Prime Minister Narendra Modi government forming a Special Investigative Team (SIT) to probe illicit financial flows.
"Illicit financial outflows are a massive problem for India. GFI research finds that India lost $343.9 billion to illicit outflows from 2002 to 2011," it said, adding: "India ranks 5th in the world in illicit outflows, and is the poorest country in the top-10 by per-capita GDP."
My Comment:
It is known to all that money in foreign banks have also been remitted through Indian Banking channels only. According to report submitted by Global Financial Integrity , illicit financial outflows are a massive problem for India. There is no doubt in it. But it is also said by same GFI that India lost 343.9 billion US dollars to illicit outflows from 2002 to 2011 i.e. during UPA rule led by none other than Congress Party whose leaders are loudly blaming BJP for non-disclosure of names.
If India really want to get back money from abroad, the government will have to first prepare the list of accounts in foreign banks which are unauthorised. If the such list is possible to be prepared, then GOI will have to look into all outflows and decide the nature of each remittance . If outflow of money is used for import of goods and services , GOI cannot treat it as illicit.
Yes here it is also true that person or company who decide to park black money used the banking channel by inflating import bill or by making fake import bill. Exporters also used banking channel to export goods at cheaper rate officially and then getting payment at rate which is difference between rate quoted and actual market rate through their foreign bank account. Both ways , Indian business houses accumulated balance in foreign banks and the same was done through legal processes only.
Obviously it is very difficult to ascertain the nature and colour of each remittances. However if the apex court decides to treat all unauthorised accounts as black money account or all money held their above benchmark as black money, Supreme Court will have to define the process of identification of unauthorised and illegal accounts. After all it is the government of India which permitted the opening of account in foreign bank through Indian embassy or through accounts of NRIs.
It is therefore not easy in my view for Supreme Court to disclose the names of all terming them all as illegal and black in nature.
Secondly , it is not easy and desirable for Supreme Court to ignore international practices, treaties and rules of ethics of maintaining secrecy of banking transactions. If Supreme Court decides to obey only Indian existing laws only without caring for future of relationship with other countries , it may order set up a separate body or instruct SIT to speed up scrutiny of each account and submit the colour of them within a timeframe set by it. There is no doubt in it the task involved is time consuming and not very easy. However by asking list of names , Supreme Court may allay the fear of discriminating treatment by the government .
No comments:
Post a Comment