The Narendra Modi government Thursday moved to permanently bury the controversial retrospective tax amendments made in 2012 that had adversely impacted India’s image as an investor-friendly destination.
The government tabled a bill in the Lok Sabha that seeks to amend the Income-Tax Act, 1961 to do away with the retrospective tax amendment in the I-T laws
When passed, the bill is likely to effectively end India’s dispute with Vodafone Plc and Cairn Energy Plc, and also in 15 other similar cases, where the I-T department had raised tax demands based on these retrospective changes to tax laws.
The bill has been introduced at a time the government has lost against both Vodafone and Cairn Energy in international arbitration. Cairn Energy has even been aggressively moving to enforce its $1.7 billion award by confiscating Indian assets overseas.
In the statement of objects and reasons for the bill, Finance Minister Nirmala Sitharaman pointed out that retrospective taxation continues to be a “sore point” for investors.
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