1. PwC India Tax Dispute Resolution Avenues January 2008 Dinesh Kanabar, Executive Director, PwC OECD – IFA Tax Conference

2. January 2008 PricewaterhouseCoopers Slide 2 Snapshot Traditional Avenues Non-traditional Avenues Structural deficiencies Concluding Remarks

3. January 2008 PricewaterhouseCoopers Slide 3 Traditional Avenues Most tax disputes are dealt with under the traditional dispute resolution avenues Substantial period of time taken at each level of dispute resolution forum At times, pro-tax revenue approach perceived at lower levels Biggest drawback – It could take upto 15 – 20 years to achieve certainty in tax position !! Supreme Court High Court / National Tax Tribunal Tribunal Commissioner (Appeals) Tax Officer 1 to 3 years 2 to 5 years 0.5 to 2 years 3 to 8 years 1 to 2 years

4. January 2008 PricewaterhouseCoopers Slide 4 Non-traditional Avenues Non-traditional avenues not very successful Supreme Court / High Court (special leave petition or writ petition) Authority for Advance Rulings Settlement Commission Competent Authority Proceedings SLP / writ option available only in extraordinary cases Generally, this option is exercisable where there is no alternate remedy available Option could possibly be used in case of gross injustice in any tax proceedings Time-frame - ?? facility available only to non- residents & public sector companies Ruling binding only on the applicant and tax office Adjudication only on the specific transaction or proposed transaction Generally takes 6 to 12 months Deals with settlement of cases where there is substantial complexity & protracted litigation Only cases pending before tax officer in a tax assessment can be settled Generally takes 10 to 12 months Division of CBDT for handling MAP matters Only few cases of MAP handled by the FTD till date Competent authorities of two countries could agree to disagree Uncertain time- frame: could take couple of years

5. January 2008 PricewaterhouseCoopers Slide 5 Structural deficiencies Tax uncertainty coupled with substantial period in litigation process At times, aggressive approach of the Tax Office & Tax Payers Huge number of pending cases before the various dispute resolution forums –For instance, the number of cases pending before the Tribunal as on November 1, 2007 is 78,374 Aggressive approach in tax collections & tedious tax refund process dents tax payers confidence Conflicting decisions at various levels of dispute resolution forums adds to the complexity of the Indian tax laws Need for simplification in tax laws & tax administration

6. January 2008 PricewaterhouseCoopers Slide 6 Concluding Remarks Need for focused benches –Recent example of international tax bench of the Tribunal Need for a settlement process –Can a taxpayer appeal to a Committee of Commissioners before an addition is made by the Tax Officer? Need for the Tax Office to accept decisions of Commissioner (Appeals) & higher appellate authorities –To avoid unnecessary litigation

7. pwc Thank You