Telecom Lead India: The finance ministry will not take
any rash action on mobile service provider Vodafone India.
Finance Minister P Chidambaram on Monday said there will
be no rash action in Vodafone tax case and the matter will be decided after
considering all aspects including recommendations of the Shome Committee on
indirect transfer of assets.
I-T assessing officers are not going to act rashly.
According to Chidambaram, factors such as section 119,
Supreme Court judgement, opinion of the Attorney General and Shome committee’s
report will be studied by the assessing officer and supervising officers.
Section 119 of the Finance Act, 2012 seeks to validate
the October 2010 order of the Income Tax Department. The Department had also
passed an order imposing a penalty of Rs 7,900 crore in April, 2011.
However, the penalty demand was not enforced in view of a Supreme Court’s
direction dated April 15, 2011.
Recently, Chidambaram directed a review of the provisions to find fair and
reasonable solutions to pending as well as likely disputes.
The retrospective tax changes introduced in the 2012-13 Union
budget had invited sharp criticism from the telecom industry.
Clarity in tax laws, a stable tax regime, a
non-adversarial tax administration, a fair mechanism for dispute resolution and
an independent judiciary will provide great assurance to insurance.
If the government goes ahead with retrospective tax
changes, the British telecom major will be forced to pay Rs 13,000 crore in
capital gains tax for buying 67 percent stake from Hutchison. The tax
department had argued that Vodafone should have deducted tax before paying the
amount to the Hong Kong-based company.
However, the two companies said no liability arose as the
transaction took place outside India. The Supreme Court agreed with their
contention that the deal was outside the jurisdiction of Indian tax
authorities.
The earlier finance ministry under Mukherjee introduced a clarificatory
amendment in the Finance Bill, arguing that the demand on Vodafone was part of
the fight against black money.
