Govt eyes a clean slate after retro tax move

Prime Minister Narendra Modi said the decision to do away with retrospective taxation sends a clear message to investors that India is opening its doors to new possibilities, emphasising that the government has the will to deliver on its promises. He was speaking at an interaction with heads of Indian missions abroad and representatives of the trade sector.India’s decision shows commitment and policy consistency besides giving a clear message to all investors that it will deliver on its pledges, Modi said. His comments came shortly after the Lok Sabha passed the Taxation Laws (Amendment) Bill 2021 that proposes to scrap the controversial retrospective application of the 2012 amendment in the income tax law to tax indirect transfer of Indian assets. Moving the bill for consideration by the house, finance minister Nirmala Sitharaman said it honoured the commitment by the late former finance minister Arun Jaitley. She recalled Jaitley’s comments in parliament in 2014 when BJP came to power. Bad for Investor Sentiments “We do not believe in applying the law in retrospect and we would certainly form a high-level committee, which will look into all such cases,” he had said. The Prime Minister also seemed to be alluding to that when he said the government had the will to fulfil its promises.The bill amends the Finance Act, 2012, and the Income Tax Act, 1961, to scrap demands raised on transactions prior to May 28, 2012. That’s when the provision to tax the indirect transfer of Indian assets came into effect. It also provides a framework for resolving international arbitration cases that the government has lost, namely those filed by Vodafone Plc and Cairn Energy.The bill was approved by the lower house by voice vote without any discussion as opposition members continued their protests against the Pegasus snooping issue and farm laws.Once the bill becomes law, the government will withdraw all tax demands levied retrospectively and also refund taxes collected and settle cases if the companies withdraw challenges filed in all legal forums.There are 17 cases stemming from the retrospective law. The government has collected Rs 8,089 crore in taxes in four of them, including Rs 7,880 crore from Cairn.

from Economic Times https://ift.tt/3jvFyWH