Regulation amending the tax law that impacts retrospective tax circumstances

New Delhi [India]Aug 5 (ANI): Finance Minister Nirmala Sisaraman’s bill to amend the tax law to abolish controversial retrospective tax rules is Vodafone, the former chairman of Cairn Energy and the Institute of Chartered Accountants. India’s (ICAI) influencing retrospective tax case said Thursday.

The 2021 Tax Bill (Amendment) Bill was tabled by the Finance Minister of Lok Sabha on Thursday.

The bill amends the Income Tax Act 1961 to require future tax rules based on retrospective changes to indirect asset transfers in India if transactions were made prior to May 28, 2012. We suggest that it doesn’t.

The 2012 fiscal draft was approved by the President on that day.

The new bill, a motion for indirect transfers of Indian assets filed prior to May 28, 2012, withdraws or provides for redemption of contentious proceedings and claims for costs, damages and interest. Suppose you do.

Ved Jain, former President of ICAI, said the change would itself resolve the arbitration issue under India’s Income Tax Act as such capital gains would not be taxed until May 28, 2012.

“The tax must be refunded in full but is interest free as certain non-interest bearing provisions have been added to Section 244A for such refunds. Applications submitted before May 28, 2012 are invalid in 17 cases, including 2 cases. Stay. We promise that these companies will not assert any claims, damages, interest, etc. “

Deloitte India’s partner Neeru Ahuja said the law was a welcome move.

“This change corrects a mistake made many years ago. It will be gone now. Much controversy about indirect transfer is now being resolved and the introduction of this bill will eliminate the process. It’s good for both parties. This also applies to companies and governments. It’s a big step in increasing security. It builds investor confidence, ”says Ahuja.

British oil and gas company Cairn Energy is trying to reclaim $ 1.2 billion from India after winning retroactive tax arbitration. The complaint against the order was filed by the Government of India with the Hague Court of Appeal on March 22, 2021.

The Tax Act of 2012 provided for the review of the application for proceedings related to the indirect transfer of assets in India under the Income Tax Act of 1961.

In this context, income tax requirements were raised in 17 cases.

In two cases, the judgment is pending on a suspension approved by the High Court. Arbitration proceedings under the bilateral investment protection agreement between the United Kingdom and the Netherlands were filed in four proceedings. In two cases the arbitration tribunal ruled in favor of the taxpayers and against the income tax office.

A purpose and justification of the new draft law states that the significant changes brought about by the Tax Act 2012 have led to criticism from stakeholders, especially about the repercussions of the changes.

“Such retrospective changes have been argued to violate the principle of tax security and undermine India’s reputation as an attractive travel destination. Major reforms in the financial and infrastructure sectors in recent years. Has started and the country says “.

“But this clear post-correction in some cases and the resulting demand is a headache for potential investors,” he added.

The statement said the country is at a tipping point today, when the rapid economic recovery from the COVID-19 pandemic takes time and foreign investment plays an important role in promoting faster economic growth and employment. It is said there is. (ANI)