The Hindu Business Line : Volcker report probe panel terms of reference today

THE Union Cabinet on Thursday approved setting up of the Justice R.S. Pathak inquiry committee — an "inquiry authority that would probe the unverified references" contained in the Volcker Committee's report relating to payment of surcharge to the then Government of Iraq for allocation of quotas of oil or food/essential items.

"It would be a single-member authority headed by Mr Justice R.S. Pathak, former Chief Justice of India," the Finance Minister, Mr P. Chidambaram, told reporters here.The terms of reference of the authority are being drawn up and are expected to be published tomorrow, he said.

On whether the Central Board of Direct Taxes has started looking into the tax records of the 125 companies named in the report to check the possibility of tax violations, he said, "Not to my knowledge. It has not happened till now (scrutiny of the tax returns by 125 companies). But I am not saying it will not happen." The Cabinet Committee of Economic Affairs (CCEA) meeting scheduled for today was deferred.

The Cabinet also approved minor amendments in the text of agreement of SAARC (South Asian Association for Regional Cooperation) limited multilateral agreement for the avoidance of double taxation and mutual administrative assistance in tax matters. The agreement was last considered and approved by the Cabinet in its meeting held on February this year.

"The agreement would be signed at the 31st session of the SAARC standing committee scheduled to be held in Dhaka on November 12-13 on behalf of Government of all the member States," said Mr Chidambaram.

The agreement would promote mutual administrative assistance and cooperation in tax matters amongst member States of SAARC.

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