Independent Directors Meet 2023 – Tax Risks and Board of Directors

Any material business decisions and actions taken by organisations, such as implementing a business model, any expansion in India or overseas, diversification, acquisitions, restructuring etc, typically have significant direct and indirect tax implications. If not addressed or planned appropriately, it can pose a significant risk to the organisation in the form of detailed scrutiny and challenges from the revenue authorities, raising of huge tax demands running into hundreds and thousands of crores with a significant impact on the cash flows resulting sometimes into a survival issue for the organisation.

In the last few years, revenue authorities have become extremely aggressive in conducting proceedings such as investigations, searches, surveys etc in an attempt to unearth and tax the transactions which ostensibly in their view are in violation of any laws. Further, both the direct and indirect tax environment have witnessed radical new developments and significant tax litigations requiring the management of the organisation to be aware and keep pace with those developments and adapt their business models and processes.

As a Tax-centric advisory organisation, we hosted a breakfast meet “Tax Risks and Board of Directors” with a select group of independent directors, putting forth our thoughts on these recent developments, the changing tax landscape and tax proceedings as well as the resultant risk mitigation that boards and independent directors need to be aware of and re-calibrate.