Tax law changes not vindictive but needed: FM

"Amendments have been proposed to ensure there is no outflow from exchequer, he said.

Defending the retrospective amendments to tax laws announced in the Budget,Finance Minister Pranab Mukherjee today said this was necessary to clarify the intent of the legislature and to ensure that the government did not have to return the tax collected in four-six other cases.

There was no vindictive agenda behind the amendments that affect Vodafone and other offshore deals,he stressed.

Mukherjee was addressing the Confederation of Indian Industrys annual conference,where Rahul Bajaj said a majority of the industry was worried about such amendments.

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There are four,five,six cases with me where I shall have to return the taxes. The amendments have been proposed to ensure there is no outflow from the exchequer, Mukherjee said,while refusing to reveal the quantum of outflow.

One amendment relates to Section 9 of the Income Tax Act relating to indirect transfer of assets held in India. The Finance Minister said the apprehension was about the reference point. What should be the reference point if not the date of enactment? The reference point is always the year when the law is enacted. But can cases be opened from 1961 or 1962? Under no circumstances can cases be opened beyond six years, he said.

Another amendment relates to Section 149 where income tax returns can be opened up to 16 years,but this relates only to black money,Mukherjee said.

Accused of policy paralysis,the Finance Minister said the industry must understand that the government has a fractured mandate and needs to take others along. We cannot fit a square peg in a round hole, Mukherjee said.

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He stressed that there was no trust deficit between the government and industry. We shall have to work together,even to the point of boredom.

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