17 circumstances on tax desk, Centre reaches out to firms for closure

WITH PARLIAMENT clearing a regulation to mark an finish to retrospective taxation, the Government has initiated “informal discussions” with firms that had been served with notices on this class, together with Cairn Energy and Vodafone Group, to settle excellent points, The Indian Express has learnt.
These negotiations might be wrapped up inside the subsequent month, sources mentioned, including that any formal assertion by both the Government or the businesses could be issued solely after that.
The Government, nonetheless, has reiterated that its sovereign proper to taxation can’t be challenged and has asserted that any settlement will hinge upon the businesses dropping their calls for for curiosity and different prices, and withdrawing all pending litigation.
“Some informal discussions have been initiated with the companies,” a senior Government official mentioned.
Responding to an e mail from The Indian Express searching for remark, a spokesperson for the Vodafone Group mentioned they had been “not commenting on the retrospective tax development”. But a supply near the corporate mentioned it can make clear its stand solely after “the negotiation” with the Government is over.
Following the retrospective modification moved by the UPA authorities in 2012, tax calls for have been raised in 17 circumstances. The authorities has collected Rs 8,100 crore in 4 of those circumstances, together with Rs 7,900 crore from Cairn Energy. This quantity will probably be refunded to firms as soon as they point out their willingness to settle the dispute on phrases specified by the Government.

ExplainedRelief for buyersTax calls for had been raised towards 17 firms following the retrospective modification moved in 2012. The Centre’s new strategy brings closure to long-drawn authorized disputes and ensures certainty round tax legal guidelines for buyers.

Last Thursday, the Government moved amendments to the Income-Tax Act and Finance Act, 2012 to successfully state that no demand shall be raised for any oblique switch of Indian belongings if the transaction had been undertaken earlier than May 28, 2012. The modifications had been cleared in Lok Sabha Friday, whereas Rajya Sabha gave a go-ahead Monday.
Following the introduction of the Bill, Cairn mentioned in an announcement that it was monitoring the progress of the Taxation Laws (Amendment) Bill 2021. “We have noted the introduction to the Indian parliament of the Taxation Laws (Amendment) Bill 2021, which proposes certain amendments to the retrospective taxation measures that were introduced by the Finance Act 2012. We are monitoring the situation and will provide a further update in due course,” the assertion mentioned.
Cairn Energy didn’t reply to requests for remark from The Indian Express.
According to the brand new regulation, demand raised for oblique switch of Indian belongings made earlier than May 2012 shall be nullified on fulfilment of specified circumstances resembling withdrawal or furnishing of an endeavor for withdrawal of pending litigation, and furnishing of an endeavor to the impact that no declare shall be filed.

The transfer to amend the laws addresses a long-pending demand of international buyers and comes seven years into the tenure of the NDA authorities — at a time when the Government has suffered reverses in its arbitration circumstances towards Cairn Energy and Vodafone.
In May, Cairn initiated the method to grab Indian belongings to implement the $1.2-billion arbitration award it received towards the Government in its longstanding tax dispute. In September final yr, the Permanent Court of Arbitration at The Hague had dominated that India’s retrospective demand of Rs 22,100 crore as capital beneficial properties and withholding tax imposed on Vodafone for a 2007 deal was “in breach of the guarantee of fair and equitable treatment”.