Experts predict major transformation in India's international tax regime
India's international taxation framework is on the cusp of significant transformation, according to tax experts and legal figures speaking at the 23rd International Taxation Conference organised by Assocham in New Delhi. Their comments, carried by Lokmat Times and The Tribune, point to a convergence of factors – from the Supreme Court's Tiger Global ruling to the rise of artificial intelligence and global digitalisation – that are set to reshape how taxes are assessed and collected.
Rakesh Nangia, Chairman of Assocham's Task Force on International Tax, told ANI that international taxation has moved beyond a phase of rapid change and entered a period of broad structural transformation. He identified the Tiger Global ruling, the new Income Tax Act, the global minimum tax framework, and artificial intelligence as key developments that will shape the future of taxation.
Tiger Global and the changing legal landscape
Central to the discussion is the Supreme Court's Tiger Global case, which Nangia said has significantly changed the global taxation landscape. He warned that businesses should prepare for a new regime of tax enforcement, cautioning against aggressive tax positions and urging taxpayers and advisors to remain within the boundaries established by judicial precedents.
"Be prepared. There will be a new regime of how the taxes will be levied," Nangia said, adding that businesses should carefully assess the risks before taking aggressive positions. His remarks underscore a broader sentiment that the era of aggressive tax planning is giving way to a more scrutinised and technology-driven enforcement environment.
Echoing this, G.S. Pannu, former President of the Income Tax Appellate Tribunal, highlighted the importance of faster and clearer resolution of tax disputes for maintaining investor confidence. He called for greater uniformity in the application of tax laws and better administrative clarity, while noting that specialised tax institutions could benefit from improved infrastructure and greater use of AI tools.
AI as a game-changer for tax administration
Artificial intelligence emerged as a recurring theme, with Nangia describing it as a potential game-changer for tax administration. He said technology could transform how tax authorities collect information, identify leakages and improve revenue collection.
Prashanth Agarwal, Partner-Tax Technology at PwC, noted that companies are increasingly examining AI and big-data technologies to transform tax functions, including compliance, business planning and litigation. However, he stressed that adoption would require reskilling, clear use cases, cost-benefit assessment and strong governance frameworks.
Prashant Agrawal, Partner, Indirect Tax at PwC, told IANS that India is among the countries rapidly expanding the use of technology to improve tax compliance, with platforms such as the Goods and Services Tax Network (GSTN) making the system easier for both taxpayers and tax authorities. He said technology has become an integral part of the country's tax system and should remain a key focus of government policy.
"GSTN is the best example, where taxpayers and the administration work together," Agrawal said, adding that a similar transformation is taking place in income tax.
The road ahead: clarity, certainty, and pace of change
Sandeep Chowdhla, Chairman of Assocham's National Council on Direct Taxes, said governments are seeking to protect their tax bases, while taxpayers are looking for greater clarity and certainty. This tension, he suggested, is central to the evolving tax landscape.
Nangia said taxpayers and businesses want a simpler tax system, fewer legal disputes and faster refunds. They also expect global businesses to not face sudden or aggressive tax measures. He argued that the rapid expansion of the digital economy requires tax systems to evolve at a similar pace, and that India needs to remain ahead of technological changes to effectively tax an increasingly digital global economy.
Experts said tax certainty will depend on clear policy guidelines, consistent implementation, and the ability of the tax administration to keep pace with evolving global business models.