Press Statement

The Polit Bureau of the Communist Party of India (Marxist) has issued the following statement:

Atleast Now, Mr. Sinha Must Quit

A two judge-bench of the Delhi High Court, including the Chief Justice, squashed on May 31st, the circular issued by the Central Board of Direct Taxes (CBDT) on 13th April 2000, exempting Mauritius based foreign institutional investors (FIIs) from paying tax on capital gains in India, including income arising from sale of shares under the Double Taxation Avoidance Convention (DTAC).

Two years ago, the CPI(M) had demanded the resignation of the Finance Minister for his blatant and brazen advocacy of providing a safe haven for FIIs through the Mauritius route. Estimates at that time indicated that the country was loosing anything above Rs. 3000 crores annually as a result of this decision. Mr. Yashwant Sinha had publicly assured the FIIs a week before he persuaded the CBDT into issuing the controversial circular, that they would be exempt from paying taxes in India.

The Mauritius route has since been used extensively by the FIIs to avoid paying taxes in India and siphoning massive amounts of foreign exchange out of the country. The loss to the country’s exchequer may, therefore, be much more than what was estimated in 2000.

The Delhi High Court order has, thus, vindicated the CPI(M)’s position. Mr. Yashwant Sinha has no grounds to remain in office any longer. It must be noted that the Finance Ministry, under Mr. Sinha’s stewardship, has been involved in a series of unprecedented scams and scandals.

The Polit Bureau of the CPI(M) demands that immediately the Mauritius route be plugged and all those involved in facilitating such brazen loot of the country be punished.