Bill in LS to bury retrospective taxes

Tribune News Service/PTI

New Delhi, August 5

In a bid to bury the ghost of retrospective taxation, the government on Thursday brought a Bill in the Lok Sabha to withdraw all back tax demands on companies such as Cairn Energy and Vodafone and said it will refund the money collected to enforce such levies.

Finance Minister Nirmala Sitharaman introduced ‘The Taxation Laws (Amendment) Bill, 2021’ in the Lok Sabha that seeks to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets.

The Bill provides for the withdrawal of tax demand made on “indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012 (i.e. the day the retrospective tax legislation came into being).” “It is also proposed to refund the amount paid in these cases without any interest thereon,” it said. The Bill has a direct bearing on long-running tax disputes with British firms Cairn Energy Plc and Vodafone Group.

India has lost two separate arbitrations brought by the two companies against the levy of retrospective taxes. The government said it will refund nearly Rs 8,100 crore collected in retro tax from firms. The Bill will effectively scrap a 2012 law that made retrospective tax demands.