Roundtable on Realising Vision ‘Make in India’:

The Tax Dimension

30 September – 01 October, 2016 Hotel Hyatt Regency, Bhikaji Cama Place, New Delhi

BACKGROUND With a growth rate of 7.6%, India enjoys the distinction of being the fastest growing large economy. It has reached a “sweet spot” which could put it on the double digit growth trajectory. Recognising the potential, the Government of India has announced ambitious reform measures, including visions such as ‘Make in India’, ‘Digital India’ and ‘Start-up India’ to enable growth and attract investments. The significance of creating a competitive, predictable, and clean tax policy environment for attracting investments cannot be over-emphasised. India has taken several important initiatives in this direction and more are in the works. For instance, the government has been providing guidance on tax issues to bring clarity and certainty. It has announced its intent to lower the tax rates and phase-out of incentives. The amendment to India-Mauritius Protocol is aimed to address the base erosion concerns. On the indirect tax front, after the passage of the Constitutional amendment, an early implementation of GST has become the top priority of the government. An optimal design of the GST can enable India to meet its growth objectives. In fact, a good and simple GST will obviate the need for corporate tax incentives. It will simplify both direct and indirect compliances, promote tax certainty and growth and provide a significant boost to the economy. GST, with the right structure, can facilitate the phase out of distortionary selective incentives and a lowering of the corporate tax rates. In this context, the Roundtable on “Realising Vision ‘Make in India’: the Tax Dimension” aims to focus on the tax initiatives – both direct and indirect taxes - that can make India an attractive investment destination by lowering the tax rates applicable to investments (while still enhancing the tax to GDP ratio to fund social, poverty alleviation, and infrastructure programs), lowering tax uncertainty, improving the ease of paying taxes and providing a transparent, stable and certain tax environment. The following pages outline the detailed agenda of the Roundtable.

In partnership with

AGENDA - Day 1

Time Session Speakers

0930 – 1100 hrs Session I - Introduction and Opening Remarks: Jeffrey Owens

Anchor: Sumit Bose, Vice Chairman, NIPFP

Session I will provide an overview of where India stands today in terms of providing an enabling tax environment to make businesses competitive and the new policy initiatives needed to take it a step closer towards achieving this objective.

Realising India’s growth dream Indian Economy: Prospects and Bottlenecks - Aggregate Tax-GDP Ratio: Meeting

India’s growth needs - Tax Mix: Investment vs

Consumption Taxation for inclusive growth

- Arvind Subramanian

Chief Economic Advisor, Government of India

- D.K. Srivastava Chief Policy Advisor, EY India

- David Bradbury Head, Tax Policy Division, OECD Discussants:

- Will Morris Global Tax Policy Leader, GE

1100 – 1130 hrs Coffee Break

1130 – 1300 hrs Session II – Optimal Tax System to enhance competitiveness,

investments and growth

Anchor: Najib Shah*, Chairman, Central Board of Excise and Customs

Session II will focus on the following aspects:

- Corporate tax rates – what is the final resting point? Can India afford to wait to reach the global norm of 20% tax rate?

- Issues of concern in the current tax incentives system in India - How to make incentives most efficient and effective - Do the tax incentives reduce only average tax burden or marginal tax

burden? - Are tax incentives good instruments for encouraging start-ups? - Do incentives promote innovation? - Are regional incentives (e.g., incentives under State VAT) a boon or bane

for the economy? - Incentives undone due to tax cascading under excise / VAT - Challenges in transitioning from the current state to the future state - The interplay between GST and need for tax incentives - Transition provisions: the biggest challenge in freeing the tax system of

incentives

- How to design the tax systems to

enhance investments: International Experience o G-20 Deliberations o Incentivising R&D & Start ups o Entrepreneurship o Rewarding Success or Effort o Capital Gains Incentives o Regional Incentives o Role of Indirect tax incentives

- How can GST contribute to the

‘Make in India’ vision o Exemptions under GST: Boon or

bane for Make in India o Direct Benefit Transfer (DBT): A

more effective alternative?

- Michael Keen

Deputy Director of the Fiscal Affairs Department of the International Monetary Fund

- Satya Poddar

Senior Advisor, EY India

1300 – 1400 hrs Lunch

1400 – 1600 hrs

Session II (Contd.) – Optimal Tax System to enhance competitiveness, investments and growth

Anchor: Arbind Modi, Principal Chief Commissioner of Income Tax, Ministry of

Finance with Additional Charge of Tax Policy Research Unit

- METR: How does tax system

impact investments and how does India rank in global tax competitiveness? o Looking at tax incentives

through the prism of METR What are METR? How does India rank in

global competitiveness Impact of game-changer

GST on India’s competitiveness

- Need for State incentives post GST

- Use and popularity of METR:

Global perspective

- GST, an opportune time to restructure corporate tax incentives

- Jack Mintz

President's Fellow, School of Public Policy, University of Calgary

- Rathin Roy, Director, NIPFP - Kavita Rao, Professor, NIPFP

- Sebastian James,

Senior Economist (Tax Policy), World Bank

- Discussant: Arbind Modi, Principal Chief Commissioner of Income Tax, Ministry of Finance with Additional Charge of Tax Policy Research Unit

1600 – 1630 hrs

Coffee break

1630 – 1830 hrs

Session III – Life After BEPS

Session III will discuss India’s concerns around BEPS and the tax measures introduced to minimise base erosion. Post the amended India-Mauritius Protocol, what are the other issues that India needs to tackle? Some of the areas of concern are: - India’s priorities under BEPS - Dispute Resolution Mechanisms: Minimum Standards and Beyond - BEPS and Transfer Pricing: The Elephant in the Room - POEM: How can India be attractive for Regional HQs? - The Digital Disruption: Coping with the tax challenges

1630 – 1730 hrs

A) Dispute Resolution Mechanisms: Minimum Standards and Beyond

Anchor: Justice (Retd.) R V Easwar

Role of Effective Dispute Resolution Mechanisms What India needs to do next Role of Cooperative Compliance

Pragya Sahay Saksena* Joint Secretary (FT&TR), CBDT, Ministry of Finance Ganesh Raj / Rajan Vora Partners, EY Jean Pierre Lieb / Jeffrey Owens

1730 – 1830 hrs

B) Amendment to Mauritius Protocol: A new beginning?

Anchor: Akhilesh Ranjan, Principal Chief Commissioner of Income Tax,

Ministry of Finance, India

- Priorities outlined by the

Government under BEPS

- Mauritius Protocol Amendment: Does India need to clean up its capital gains taxation?

- Pinakin Desai,

Partner, EY India - Pranav Sayta,

Partner, EY India Discussant: Arbind Modi, Principal Chief Commissioner of Income Tax, Ministry of Finance with Additional Charge of Tax Policy Research Unit

AGENDA - Day 2

Time Session Speakers

0930 – 1100 hrs

Session III – Life after BEPS (Contd.)

C) Tax Certainty and Growth

Anchor: Jeffrey Owens

- Tax Policy opportunities for

strong, sustaining and balanced growth

- BEPS environment and Tax certainty: How are other jurisdictions dealing with it?

- Martin Kreienbaum

DG International Taxation, Germany and Chair, OECD's Committee on Fiscal Affairs

- Chris Sanger Head, Global Tax Policy, EY

1100 – 1130 hrs

Coffee Break

1130 – 1300 hrs

D) BEPS and Transfer Pricing: The Elephant in the Room

Anchor: Akhilesh Ranjan, Principal Chief Commissioner of Income Tax,

Ministry of Finance, India

- How does BEPS affect the

developing countries? o Are the developing

countries getting a fair deal?

- Outcomes from G20: BEPS TP

related actions - TP Issues in India - POEM: Impact on Regional HQs

- Rajul Awasthi

Senior Tax Specialist, Global Tax Team, The World Bank

- Ila Patnaik, Professor, NIPFP

- David Bradbury Head, Tax Policy Division, OECD

- Vijay Iyer, Partner, EY India

- Matthew Frank

Senior Tax Counsel, GE

1300 – 1400 hrs

Lunch

1400 – 1600 hrs

E) The Digital Disruption: Coping with the tax challenges

Anchor: Ms Rani Singh Nair, Chairperson, CBDT

India’s take on taxing digital transactions Equalisation tax E-commerce and GST

- Rajendra Nayak /

Jayesh Sanghvi Partners, EY India

- Industry Speaker

- V S Krishnan

Former Member, CBEC

1600 – 1700 hrs

Conclusion and Wrap up

Jeffrey Owens / Sudhir Kapadia / Satya Poddar

*Awaiting confirmation

Thank you