Upper House passes law scrapping retrospective taxation amid walkout

The Bill proposes to amend the Income Tax Act, 1961, to effectively end all retrospective taxation imposed on indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012. Sitharaman hoped the law will be “appealing enough” to foreign investors since it puts an end to the “ghost which we have been carrying…from 2012”.

She said India had been bearing the “negativity” of the 2012 retrospective taxation amendment. She said scrapping retrospective taxation will “make India look a very clear, transparent and fair taxation land.”

At the same time, she asserted, “We are keeping the sovereign right of India to tax absolutely intact.”

To a question by BJD’s Amar Patnaik on whether the government has confirmation that Cairn Energy or Vodafone, against whom the retrospective tax law was invoked, will not pursue any further appeals after enactment of the law, Sitharaman said, “Once it is passed, we are confident that they will also find the provisions very useful for them and, probably, consider taking into consideration what we brought in.” She said in three cases the government will refund disputed amounts collected. “There is…Cairns, which has Rs 7,879.73 crore. There is…Vodafone, which has Rs.44.74 crore. The third one has about Rs 48 crore,” she said.