New Delhi, July 18: Finance minister Arun Jaitley Fri aforesaid India won’t levy any tax with retrospective result that makes further burden and existing anomalies during this regard would be corrected.
“One thing we’ve got created terribly clear: No retrospective tax making contemporary liabilities are obligatory,” Jaitley told the Lok Sabha, the lower house of parliament, in his reply to the talk on the national budget for this financial .
He infernal the previous United Progressive Alliance (UPA) government of making such an anomaly and aforesaid the National Democratic Alliance (NDA) government beneath Prime Minister Narendra Modi was attempting to rectify it.
“Retrospective tax was created by you. This mess of tax act of terrorism was yours and we are trying to bring civility back by clearing it,” aforesaid the finance minister, bearing on the capital gains tax of 2012 that was obligatory with result from 2007.
Retrospective taxation has elicited abundant criticism from domestic and overseas investors, notably Britain-based international telecommunication major Vodafone. In his budget speech earlier this month, Jaitley had assured that India won’t resort to that indiscriminately.
“The sovereign right of the govt. to undertake any retrospective legislation is unquestionable,” the government minister had aforesaid throughout the course of his two-hour-long budget speech.
“However, this power has got to be exercised with extreme caution and judiciousness, keeping in mind the impact of every such live on the economy and the overall investment climate,” he said.
“This government won’t unremarkably achieve any modification retrospectively that creates a fresh liability.”
The finance minister acknowledged that once some amendments to the tax Act of 1961, dispensed in 2012 with a retrospective result, many cases had return up in numerous courts and different legal arenas, which are awaiting verdicts.
“At this juncture i’d prefer to convey to the present august house and also the investors community at giant that we are committed to supply a stable and predictable taxation regime that may be investor friendly and spur growth.”
He aforesaid all fresh cases of retrospective amendments in indirect transfers and coming back to the notice of the assessing officers are scrutinised by a high level tax committee before any action is initiated in such cases.
“I hope the investor community each inside India and abroad would repose confidence on our expressed position and participate in the Indian growth story with revived vigour.”
Vodafone, that was abused with a Rs.20,000 crore retrospective capital gains tax once it acquired the telecommunication assets of an Indian company in 2007, has maintained that it’ll continue with the continued international arbitration to resolve the dispute.
“We note the finance minister’s announcement that existing cases arising from the 2012 retrospective tax law ought to follow the lawful method during which they’re presently being adjudicated,” the company had aforesaid in a statement once Jaitley’s budget speech.
“Vodafone can, therefore, continue the method of international arbitration initiated beneath the India-Netherlands Bilateral Investment accord.”