Once the Taxation Laws (Amendment) Bill goes into effect in 2021, the government will have to pay Rs 8000 crore to four companies, including Cairn Energy, Vodafone, WNS Capital and one more, early next week, the Central Board of Direct Taxes (CBDT) said. The chairman JB Mohapatra under the Tax Laws Act (Amendment) 2021 was passed in Rajya Sabha.
The bill will abolish the retrospective tax regime and all retrospective taxes levied on indirect transfers of Indian assets prior to May 28, 2012.
See Zee Business Live TV Streaming below:
This means that the tax claims on companies such as Cairn Energy and Vodafone are now being withdrawn.
In an exclusive interview with ANI, the CBDT chairman said, “As far as I know, there are four cases. Apart from Cairn Energy, three other cases are WNS Capital, Vodafone and there is another case Rs 8000 crores are paid out as a refund and the refund is without interest. “
Mohapatra said, “In the Minister of Finance’s statement, there are about 17 cases where four claims have been partially paid, and these are the four cases where claims have been paid.
There are another 13 cases where claims have been made but have not yet been detected.
So it is a simple reimbursement by the Income Tax Department for the payments they made, they are reimbursed in relation to the amendment presented at the time of adoption and approved by the President and becomes law.
`Mohapatra said we are trying to end the lawsuit. Bill is passed in Rajya Sabha. Now it comes back to the Lok Sabha for confirmation, then it goes to the Ministry of Justice and is then notified.
We’ll have the new law early next week, he said. “This has long been one of the pain points for the department.”
In 2012 this bill came into law. It had a story of its own. Even now, the prospectiveness in tax law is not bad per se. This retrospective has always been around.
“If you remember the history of Section 14A that came in 2001-02, it was changed within two years by issuing a circular and then the rules for Section 14A were also written down by Rule 8 in 2008, but if you do Coming to Section 37, it was amended in the Finance Act 1998 in response to a specific decision by the Bombay Tribunal in the Pranab Construction case in which the Tribunal held that the legal payments to the gangs operating in the Bombay Building Circle were payments from builders up towards the idiots and anti-social elements, they could also be eligible for a tax deduction.
To counter such interpretations, a statement was included in the Finance Act of 1998, but it was a 1962 retrospective, ”said the CBDT chief.
“The same was done in the case of Section 9 in the Vodafone case. So in retrospect, it’s not always bad. It all depends on a specific point in time and context for retrospectivity to kick in, ”added CBDT boss.
“In the Vodafone case, after the amendment introduced in 2012, it was long of the opinion that decisions made by companies before 2012 should not be affected by the same regulations. Therefore, it was retrospectively reconsidered and the law that was drafted in 2012 was not wrong. It has received very positive reviews from the Indian government due to the change, “added Mohapatra.
The CBDT chairman denied that the change decision was taken under any pressure.
He said: “The communication of the items and the reasons for introducing the amendment were given very concretely in the declaration of the Minister of Finance in Parliament, and the amendment is not case-specific, it is case-independent.
There was no formal or informal pressure to push this amendment through.
“The chairman of the CBDT said,” It has taken nine years, a lot of thinking about why this change was necessary in order to build trust and reassurance in the interpretation of tax law. This amendment was tabled, there was absolutely no pressure. This change is just to make things clear and straightforward to the investing community. “
“All thanks to joint leadership, both at the level of the bureaucracy and government, as well as the political leadership that has helped steer this change,” said the chairman.
He said, “As far as I can remember, there was no objection to the amendment being made.
The only question that was raised was the timing of this amendment, but the timing was also perfect because all along the government wanted the legal process to run its course.
The government also recognizes that it is time to do the right thing and regain investor confidence to invest in India.
“Mohapatra said:” An important point in the bill is the commitment, which will be unilaterally clear and presented by the opposing party stating that they will withdraw all appeals and any litigation they have initiated on these issues in any forum. in any global forum.
To take advantage of this change, you must not receive any interest. So there is no interest payable on the refunds you are guaranteed. In order to benefit from the staggering, this is part of the agreement that the refund will be made without interest.