BAJAJ FINANCE LTD.
TAX GOVERNANCE POLICY
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Table of Content
Sr. No. Content Page No
1 Objective 3
2 Policy scope & applicability 3
3 Tax Related Compliances 3
4 Tax cost and mitigation of tax risk 4
5 Relationship with Governments and Tax Authorities 4
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1. OBJECTIVE
Bajaj Finance Ltd. (‘BFL’, ‘Bajaj Finance’, or ‘Company’), a subsidiary of Bajaj Finserv
Ltd, is a deposit-taking Non-Banking Financial Company (NBFC-D) registered with
the Reserve Bank of India (RBI) and is classified as a NBFC-Investment and Credit
Company (NBFC-ICC).
BFL is engaged in the business of lending and acceptance of deposits. The
Company has a diversified lending portfolio across retail, SMEs (small and medium
sized enterprises), and commercial customers with significant presence in both
urban and rural India. It accepts public and corporate deposits and offers a variety
of financial services products to its customers.
BFL and its subsidiaries’ (BFL Group) Group’s Code of Ethics and Personal Conduct
(CoEPC) requires all employees to comply with Laws of the Land. The CoEPC
requires all employees must comply with all rules and regulations and laws
including but not limited to GST, Profession tax, Income Tax, registrations/ licenses,
and renewal thereof under various laws.
In addition to applicable taxes on income, BFL Group also complies with other types
of taxes such as goods and service tax, property tax, environment tax, local tax,
customs duties, etc. as applicable to the BFL Group
Under our tax risk management strategy, we manage our tax affairs taking into
consideration building long term shareholder value and to maintain our reputation
as a responsible taxpayer with tax authorities and regulators.
2. SCOPE AND APPLICABILITY
This tax policy is applicable to BFL Group.
3. TAX RELATED COMPLIANCES:
BFL Group is committed to comply with existing laws and regulations and have a
policy of zero tolerance to non-compliance. BFL Group endeavours to undertake all
statutory tax compliances in all jurisdictions / states it operates within prescribed
timelines. Technologies have been deployed to track the compliances within the
timeframe provided with suitable escalations and reviews.
While undertaking such compliances, appropriate due diligences are carried out
internally, and a valid maker-checker procedure is adhered to. BFL Group maintains
mandated records, information, necessary documentations etc. and extends full co-
operation to agencies appointed for audit compliances. BFL Group also ensures that
all related parties’ transactions are carried out at arm’s length price as per applicable
tax laws and regulations.
The tax positions required to be taken by BFL Group, is analysed by the in-house
tax team as well as wherever needed by external tax advisors. In case of complex
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tax positions or where multiple interpretations are possible, the company takes
opinion from legal counsels or external tax advisors and maintains appropriate
documentation for the same. In case of complex tax positions, the same are also
reviewed/ discussed with Chief Financial Officer (CFO) and where needed senior
leadership and thereafter, the same is adopted by the Company.
4. TAX COST AND MITIGATION OF TAX RISK:
We understand the role played by Corporates in the overall development of the
economy. Tax revenues, being the largest contributor to the overall collections of the
Central and State Government, enables them to undertake various welfare and
development schemes to make a progressive country. We feel proud in having
participated in these efforts and have paid all the taxes legally due in India, in
accordance with the rules set out by the relevant Government(s)/revenue
authorities.
We are responsible for determining the tax objectives and ensuring that all applicable
regulations as well as internal guidance and governance procedures relating to
taxation are observed. We adhere to the internal control framework with a
component of tax risk assessment and controls and the same is reviewed by internal
and external teams.
Tax legislations are complex and often tax risks arise from differences in the
interpretation of tax laws between the BFL and Revenue authorities. This situation
may result in disputes leading to tax risk and tax litigation. BFL Group endeavours to
limit tax risks to ensure that there is no loss (financial/reputational) or impediment
to conduct of its business affairs. BFL also monitors changes to tax legislation and
government policies on continues basis and determines its impact on the business
and takes action, as per requirement to mitigate the risk, if any.
5. RELATIONSHIP WITH GOVERNMENTS AND TAX AUTHORITIES
We maintain an open, honest, transparent, and constructive relationship in all our
dealings with the tax authorities.
BFL Group proactively participates in formal consultation process with tax
authorities directly or via various industry bodies in relation to pre-budget
discussions as well as various amendments carried out in tax laws from time to time.
All our group entities ensure compliance with the relevant tax laws. In case of any
disagreement with the tax authorities, necessary discussions are initiated with
relevant tax authorities and ensure that the same are resolved with constructive
discussions.
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