Black Money: SIT’s action plan will have “carrot and stick” policy

Black Money: SIT’s action plan will have “carrot and stick” policy

The release also said, SIT will prepare a comprehensive action plan including creation of necessary institutional structure that could enable the country to fight the battle against unaccounted money.Narendra Modi

The official press release issued by the Modi government soon after the Union Cabinet meeting on black money, talked about approving constitution of special investigation team (SIT) – which would be headed by two former Judges of the Supreme Court and a high level committee comprised with Department of Revenue, RBI, IB, ED, CBI, DRI, CBDT (IT), NCB, FIU and RAW.

The release also said, SIT will prepare a comprehensive action plan including creation of necessary institutional structure that could enable the country to fight the battle against unaccounted money. The first SIT meeting will take place on June 4.

So what would be SIT’s action plan? If sources from central agencies are believed than it would be a mix of “carrot and stick” policy, with few shocking elements.

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But before that, it is important to be informed that all these central agencies are expecting an official notification from the central government on the formation of SIT for black money, and a simplification or clarity on the role which each agency have to play.

It was reported that CBI has asked his team to collect all the information regarding black money in association with other agencies and prepare a report. When queried CBI, the spokesperson said, “we are still waiting for an ORDER, unless we get that – how could we instruct our team.”

Similar reply came from the Income Tax department. A senior IT commissioner said, “We are still waiting for an official notification on this issue, once it comes, than only our department will start working on it.”

The fact remains, the IT department – which has ample information of individuals and entities (having unaccounted money abroad) is still not clear on how this SIT would really work on ground. “We are surprised that in the list of central agencies, CBDT has been kept in the last, in fact, it should have been the leading driving force of SIT,” an IT official said.

However, has been told that – SIT would be working on several aspects.

Since last three years, IT department has been examining and investigating almost 600 names (which was stolen and handed over to Indian government) who had bank accounts in HSBC, Geneva. In addition to it, more than 200 names shared by Washington based International Consortium of Investigative Journalists (ICJI).

Sources says, the lists comprises politicians, industralists, traders, NGOs, trusts and corporate entities. “Notices has been sent to all these suspected names. Some of them have admitted that they had unaccounted money abroad, but large number of them dont agree with it,” an IT official said.

After a brainstorming session among these agencies, a final list of individuals and entities (who has admitted but has lack of authentic evidence or those who has not even admitted or those names which are still missing) would be prepared, against whom SIT will start its work.

“Identification of location (tax haven countries), bank accounts, real beneficiary and the real figures of unaccounted money – would be our first task,” the source said.

The shocking and surprising element here would be – an undercover operation. Sources said, “if required, in certain cases – an undercover operation would be initiated – to get strong evidence against these names.” May be thats the reason – agency like RAW and IB has been included in SIT.

The major challenge the Indian government is facing right now, is lack of support from tax haven countries, especially, from Switzerland. “We will try to work out a plan between both countries, where it would be a win-win situation for both. We would request the foreign country to give specific details of individual cases, remitt the unaccounted money (after tough bargain) – whether some percentages or a good size,” the source said.

“Wherever required, treaties would be worked out or may be amended. If there is a situation, let say, a tax evader has diverted his unaccounted money in a new separate bank account, especially in a country with whom India has no foreign relations, in that case – we have to form a new treaty,” a senior ED official said.

Agency officials are also talking about a new Act. “If required, we might come out with a new law that allows us to attach a property (movable or immovable) in India, in a case, where we found a big corporate individual is having an unaccounted money abroad, but not willing to share the details or if foreign country is not willing to support us, but we have strong evidences against him. At least, we would attach equivalent amount of property back in India,” an ED official said.

These are some “stick” based policy, but there are few “carrots” as well. In coordination with the new central government, these agencies might come out with few voluntary schemes, that would allows tax evaders to reveal the real numbers of black money stashed abroad, without any fear. “In return they might have to just pay 30 percent income tax on the total sum, that also – without facing any prosecution proceedings (no penalty, no interest and no criminal/legal action),” an IT official said.

Well, these were some rough sketches of SIT’s action plan. How it would get formulated and implemented on the ground – that would be seen only after the first SIT meeting, whenever it takes place, which also a need of an hour.

“Do not expect much from this SIT. The number of agencies involved this time, will have more confusion than solution. And most important, whether it would be positive or negative, results would seen only after few months and not immediately,” an senior revenue official concludes.

Source by indiatoday…



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