that the proposed amendments in tax regulations are not aimed at opening old
cases. But the FM did not clarify about the Vodafone issue which is likely to
affect the Indian telecom industry if not handled properly.
intent, but the ministry wants to protect the investors from double taxation.
of old cases on this plea or that plea because that is simply not permissible
under the laws,” Mukherjee said at a meeting organised by the
Confederation of Indian Industry.
As per the Budget proposal, Vodafone tax issue is likely to
be re-opened by the government. Presenting the Union Budget 2012-13, the
finance ministry proposed amending the Income Tax Act with retrospective effect
to bring into tax net overseas transactions like the Vodafone-Hutchison deal.
The recently announced Finance Bill said property is defined
and included any rights in or in relation to an Indian company; transfer is
defined as disposing of or parting with an asset or any interest in
property.
The taxability of the indirect transfers has unfolded
through retrospective amendments in the provisions codifying the source base
taxation, which will impact the cross border transactions and the debate will
again knock the doors of the Court.
If the finance minister is not taking up the issue Vodafone
case, it will be a big relief for the telecom major in India.
Vodafone verdict in $2.2 billion tax case
Few days ago, the Supreme Court had rejected the
government’s plea to review the January 20, 2012 judgment of the apex court
quashing the I-T department’s decision to levy Rs 11,000 crore capital gains
tax on Vodafone for acquiring Hutchinson’s mobile business in India through an
offshore deal.
