Engineering and Infrastructure consultant companies in the country in a letter written to the Prime Minister Mr Narendra Modi has urged the government to immediately change the definition of Indian company in the companies Act to make the country ‘Atma Nirbhar Bharat’.
“As per the companies Act presently any company registered in India and paying taxes is considered Indian , this provision is being misused by most of foreign companies . They register themselves and start operating in India , pay taxes and carry the profits home. Apart from profits they also take all the benefits provided to Indian companies especially MSME’s” said Mr K K Kapila Past President, FICCI Infrastructure Committee and President Emeritus, International Road Federation (IRF) in his letter to Prime Minister Narendra Modi.
“The Indian company Act currently defines any company having registered office in India and that has income liable to tax in India should be immediately changed and a company having about 60 Per Cent Indian shareholding should only be allowed to operate in India. The issue assumes significance as the foreign companies have mostly operated here by setting up Indian subsidiaries. In many cases a ‘private company’ status is preferred for such subsidiaries due to greater compliance and disclosure requirements for public companies.” said Mr Kapila.
“Immediate need is that the definition of a domestic company is made to include an Indian company, as well as a Company having its registered office out of India, but having all of its shareholders in India, and conducting all activities in India. It should have 60 % Indian shareholding, “added Mr Kapila.
“At present most of foreign and multi-national companies after registering as Indian company an paying Indian taxes are siphoning huge profits back . They are taking all benefits provided to Indian companies . This is going to be the biggest deterrent to prime minister Narendra Modi’s Ätma Nirbhar Bharat’ Campaign . The redefining Act will help Indian companies to manufacture ‘Make in India ’products and also discourage foreign companies from taking part in infrastructure bidding process under garb of Indian subsidiaries or companies, ` Mr Kapila said .
This will then enable the Government to restrict tendering amongst the Indian Companies which have in-house expertise.