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Alarm bells ring over British Columbia treaty override
Last fortnight, Vancouver, British Columbia hosted the annual International Fiscal Association (IFA) Congress with over 1000 international tax experts representing large MNCs, international tax experts, academicians and tax administrators of several jurisdictions. Expectedly, the buzz centered on India’s Direct taxes code. Most participants expressed anxiety on DTC provisions impacting cross border investments, particularly on General anti-avoidance rules (GAAR) and were perplexed with a position that the Indian domestic law can override a double tax treaty (DTT).

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Confusion confounded

Business Standard / New Delhi December 17, 2009, 0:58 IST More than a week after the Union government intervened to get Telangana Rashtra Samiti (TRS) president K Chandrasekhar Rao to break his fast on the assurance that “the process of forming the state of Telangana will be initiated, (and) an appropriate resolution will be moved in the state Assembly”, no one is any wiser as to what will happen next. The Centre is right to insist that this late night statement of the Union home minister is nothing new and it merely reiterates the sentiment of the state Assembly where legislators cutting across party lines thumped their desks when former state chief minister Rajasekhara Reddy announced, in February 2009, that “the state government has no objection to formation of Telangana state in principle” and that “time has come to move decisively on the matter”. However, the fact also remains that the Congress party did not make any commitment on statehood for Telangana in its election manifesto even as most of its rivals did. In the event the democratic verdict in Andhra Pradesh went overwhelmingly in favour of the Congress, with the TRS performing poorly in the assembly elections and recent local elections, including in the city of Hyderabad. It is, therefore, ironic that a party that secured a decisive mandate in the elections chose to capitulate to the demands of a party that had lost out and that too against the background of violence on a university campus and a fast undertaken by the leader of a defeated party. This entire episode raises serious issues pertaining to democratic governance and political leadership. US markets end in the green While the situation on the ground in Hyderabad has been retrieved through capitulation, it cannot be preserved through procrastination. At some point, the state Assembly will have to meet and take a view. Given the regional division within all political parties, it is likely that the outcome may be along regional lines. Most political parties, barring the TRS and the communists, have thus far adopted double standards on the Telangana issue. Unless political parties reformulate their position through intra-party consultations and there is consensus across political parties, there would only be more violence and the Centre may feel obliged to step in with President’s rule, which would not solve the problem, merely postpone it. All this means prolonged uncertainty for the state and the city of Hyderabad. None of this augurs well for the people of the state and for the country as a whole, with so many other demands for statehood sprouting up. The manner in which the Telangana issue has been handled by the Congress party leaves much to be desired. One consequence of last week’s bungling has been the rejuvenation of the United Progressive Alliance’s coalitional system of decision-making. In one of its rare meetings, the Cabinet Committee on Political Affairs met this week to discuss the issue, but chose not to pronounce its wisdom on the matter, calling for calm and restoration of law and order. One option for all is to postpone the issue to 2014. Appointing a commission to examine the issue is the only way in which this can be done without provoking violence in the state.


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