India's non-signing of Automatic Info Exchange agreement - ‘Confidentiality’ vs 'disclosure' crossfire
India's backing out at the last minute as 51 countries signed the historic multilateral convention on global automatic exchange of information has stunned many in the tax world. Finance Minister Arun Jaitley, in his blog, has sought to pin India's non-participation on the issues regarding constitutionality of 'confidentiality' clauses in India's DTAAs, and has called for a re-consideration of this strict view (taken by the Court). The Finance Minister has further opined that in a choice between unauthorized disclosure and disclosure as per treaties, the latter is both a fair and beneficial proposition.
With the Government seemingly caught in a crossfire between 'confidentiality' clause in DTAAs and insistence on name disclosures by Indian Courts, is there a way out of this impasse? Is disclosure of names, but by honouring tax treaties, the more beneficial option, as suggested by the Finance Minister? Will India staying out of the multilateral convention, stem the information flow and put a big question mark in its its fight against tax evasion & black money?