India’s move to amend the Income Tax act retrospectively is not Vodafone-specific and won’t hurt the country’s investment climate,the visiting Commerce and Industry Minister Anand Sharma has said.
“The clarificatory amendment is retrospective in character and it was not Vodofone-specific. I don’t see,in any manner,the investment climate will be hurt,” Sharma said at a media briefing here last evening,after meetings with Britain’s Chancellor of Exchequer George Osborne and Secretary of State for Business Innovation and Skills Vince Cable.
“India remains one of the best investment destinations. Returns on investment in India is the highest in the world,” he added.
Sharma said the issue was discussed when Chancellor Osborne met Finance Minister Pranab Mukherjee in Delhi.
“We have a very stable tax regime and policy regime which is judicious,” Sharma said,adding that the Finance Minister will respond to debate in Parliament on the issue.
UK-based mobile operator Vodafone purchased Hong Kong- based Hutchison’s telecom business,which included operations in India,in 2007 for about USD 11.2 billion.
Indian income tax authorities said the deal will attract tax on it and sought Rs 11,000 crore from Vodafone,which challenged the move.
The Supreme Court ruling held that Vodafone wasn’t liable to pay tax on the deal,following which the government has proposed to amend the tax laws retrospectively to bring in the net such deals.
On Pakistan’s move to grant India the Most Favoured Nation (MFN) status,Sharma said,”In the last one year there has been much forward movement. There is a growing realisation that economic engagement can yield positive dividends.”
He said,however,that it is well below the potential given the trade between the two countries,the formal trade is less than USD 3 billion,while informal trade through 3rd countries is close to USD 10 billion.
On the issue of UN sanctions against Iran,Sharma said,”India has taken correct and consistent view of this issue. We have respected every UN resolution. We are not in violation of the UN resolution.”