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Just when one thought that the issue of retrospective tax was dealt with the income tax officials issued a â€˜clarification‘ which is more confusing than the original notification and has once again ignited the retrospective tax debate.
The government, in the Budget 2016-17, had announced a scheme to settle the retrospective tax disputes by waiving interest and penalty if the companies paid up the principal tax amount. The scheme opened on June 1 and is due to close on December 31.
The government using retrospective tax legislation had in January 2014 issued a tax notice on Cairn Energy for alleged capital gains it made on a 10-year old internal reorganisation of its India unit.
The one-time offer to settle tax issues by waiving of interest and penalty, if the companies paid up the principal tax amount, had opened on June 1 this year.
The IT department has assured the UK-based explorer that the tax demand shall not be enforced till June 30.
The Department had on January 22, 2014, issued a draft assessment order of Rs 10,247 crore on alleged capital gains the company made in a 2006 reorganisation of its India business. Two years later, it issued a final assessment order.
Revenue Secretary Hasmukh Adhia also says the Finance Bill will lay retrospective tax resolution process into a law
Speaking at the World Economic Forum (WEF) India summit, which has 250 stakeholders and leaders, including Union Ministers in attendance, Jaitley said also hoped that the Goods and Services Tax Bill will come into force soon.
Minister of State Jayant Sinha has been assigned the task to find a solution and is expected to seek help from an expert committee to look into the tax matter.
The recent tax demand made on Cairn Energy under the retrospective tax clause has generated a lot of anxiety.
Jaitley said the adversarial tax regime in India had scared investors away and none of the past issues had fetched any revenues for the country either
With the Union Budget just a couple of hours away, expectations are running sky high from what finance minister P Chidambaram might announce to boost the sagging economy.
The Revenue Department has sent a reminder notice to British telecom major Vodafone to pay taxes, estimated at around Rs 11,200 crore, for its acquisition of Hutchison's stake in 2007.
The Parthasarathi Shome led panel has submitted its report on retrospective tax amendments. In an exclusive chat, Shome said the panel feels that prospective capital gains tax is the best way forward. He also added that some safeguards are necessary if the government decides to go for retrospective taxation.