Recommendations on retro-tax laws under examination: Govt

The government today said it is examining recommendations of the Parthasarathi Shome panel on controversial retrospective tax laws introduced in the last Budget. "The recommendations of the Committee on retro-tax laws are under examination by the Central Government," Minister of State for Finance S S Palanimanickam informed the Lok Sabha through a written reply.
    
The retrospective amendments to the Income Tax laws introduced in the Budget 2012-13 by the then Finance Minister Pranab Mukherjee had generated controversy as several global companies criticised the move. The amendments were made following the Supreme Court judgement last year which went in favour of UK-based Vodafone in a tax case after it had bought Hong Kong based Hutchison's telecom assets in India.
    
Among other suggestions, the panel recommended that either the government withdraw the retrospective tax amendment or waive interest and penalty if it recovers the taxes. On the issue of removing of capital gains tax, Palanimanickam said the Budgetary exercise was under progress and "government's response in this regard shall be reflected in the form of Finance Bill, 2013".
    
He also said the major recommendations of the Shome Committee on GAAR have been accepted by the government with some modification. "The implementation would be done through required legislative changes in due course," he said. The government has agreed to implement GAAR from April 1, 2016 and the provisions will not apply to non-resident investors in FIIs.