In just a decade, Dhruva Advisors has come to be regarded as a credible source of tax and regulatory services in India, with some of the largest MNCs among the firm’s clients. Dinesh Kanabar, CEO, talks about the direction and pace of India’s tax reforms, the need to cut disputes that lock capital, and what more requires to be done to achieve the twin but potentially mutually compatible objectives of revenue productivity for the government, and growth of business and economy. Excerpts from an interview with Priyansh Verma and K G Narendranath.
Q. Tell us about the journey of Dhruva Advisors.
Our vision from the start was to become a tax and regulatory boutique that was free from conflicts, a thought leader, and a provider of comprehensive services in the tax and regulatory space. We believe we have carved a niche by challenging the status quo and placing integrity and expertise at the core. We have now expanded to 10 offices across India, the UAE, and Singapore, with a team of 395, including 33 partners. We continue to offer our clients holistic, out-of-the-box solutions that combine risk mitigation, compliance, and tax optimisation.
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Q. The Income Tax Act, 1961 is being rewritten. What should be the major areas of focus?
Among the most pressing areas for reform is (the inordinate delays) in resolution of tax disputes. Currently, there is a substantial backlog of appeals, with cases taking almost five years to progress through the first appellate stage. Disputes often escalate to the Supreme Court, especially in cases where the stakes exceed Rs 5 crore, and final resolution takes up to 15 years. Such delays are a barrier to India’s goal of enhancing ease of doing business.
A potential solution is to allow taxpayers to settle disputes at the assessment stage itself, thereby avoiding prolonged litigation. One-off initiatives like the Vivad Se Vishwas scheme have had only limited impact. A more robust and institutionalised approach is required.
Another area demanding clarity is the interpretation of tax treaties. Recent judgments have highlighted ambiguities, particularly concerning provisions such as the Most Favoured Nation clause.
Q. TDS structure is seen complex…
The withholding tax (TDS) provisions are a source of considerable disputes.
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