Centre Advocates Fair Taxation: ASG Venkataraman’s Reassurance to Businesses

In a robust affirmation of fair taxation practices, Additional Solicitor General (ASG) N Venkataraman assured businesses that the Central government is committed to supporting them if tax officials are found guilty of abusing their power. This assurance was made during the Gujarat High Court Arbitration Centre (GHAC) Arbitration Week 2026, which took place on September 5 at the GIFT City Club. The event, titled ‘An Introduction to Investment Treaty Arbitration, BIT, Future of ISDS’, was organized by GHAC in collaboration with the Gujarat High Court. The session featured participation from Senior Advocate Arvind P Datar and was facilitated by advocates Uchit Sheth and Soham Patel.

ASG Venkataraman emphasized that the government is keen on ensuring that legitimate businesses are not hampered by unwarranted tax demands. “If you find any misconduct where authority has been abused, bring it to court, and we will support you. We guarantee that we do not wish to harm trade,” he stated.

He further clarified the government’s stance on tax collection: “We do not want to collect even one rupee that is not due. However, what is due, even if it is a single rupee, cannot be ignored.” This statement came as a reassurance in response to concerns raised by Datar about the impact of aggressive tax demands on businesses and foreign investors.

Datar pointed out that taxation policy is a significant concern for foreign investors, citing instances involving Vodafone and Tiger Global, which have created uncertainty regarding India’s tax policies. He stressed that while investors can plan for high tax rates, they cannot operate under a regime where tax liabilities are unpredictable.

“To ensure ease of doing business, we must protect businessmen alongside revenue,” Datar argued. He highlighted that the government had retracted high-value tax notices after realizing they were unwarranted, exemplifying the Centre’s commitment to a fair taxation environment.

The discourse further delved into the necessity of robust Bilateral Investment Treaties (BITs) for attracting foreign investments and achieving India’s “Make in India for the world” vision. Datar criticized the termination of 58 BITs post-2010, following adverse rulings in cases such as White Industries, Vodafone, and Cairn Energy. He argued that the value of claims under these treaties was negligible compared to the $700 billion in foreign investments India received over the past 15 years.

Datar also critiqued aspects of India’s 2016 Model BIT, including the exclusion of taxation from BIT arbitration, the removal of the Most-Favoured-Nation clause, and the mandatory five-year pursuit of domestic remedies. He termed the definition of investment under the model as overly restrictive.

“Companies like Infosys and Hyundai are not investing for the development of India or the US; they are in it to make profits. Thus, business realities should not be overshadowed by idealistic expectations,” Datar insisted.

Venkataraman, defending India’s stance on BITs, noted that many countries in Europe, South America, and Africa have also reconsidered their investment treaties over concerns about regulatory sovereignty. He maintained that tax disputes should be resolved through domestic courts and Double Taxation Avoidance Agreements, as taxation is an inherent sovereign function.