Retrospective Tax Proposals made by Government of India in Finance Bill 2012 has led to controversy among the many entities which are to be affected by amendments.
Most visible case of Vadafone Hutch deal which had caused government to loose Rs. 110 Billions as Tax.
as noted by Hindu Newspaper, Section 9(1)(i) to clarify that an asset or a capital asset being any share or interest in a company registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India if the share or interest derives, directly or indirectly, its value substantially from the assets located in India. Thus the amendment is not only expressly classificatory but even expressly retrospective. This is perfectly legal by all judgements of Supreme Court.
FM has stated that several companies who have paid earlier have already asked for refund after Vodafone judgement and more may follow. This, in fact, would lead to much greater instability than the stable situation that the amendment will bring for all time to come.
Vodafone on 04/17/2012 threatened to drag the government of India to international arbitration over retrospective tax legislation under the bilateral investment treaty (BIT) between India and the Netherlands.
Retrospective Tax Proposals are not being done for first time in the world. They are in fact part of Law making process and refining law to Protect interest of a country.
Most visible case of Vadafone Hutch deal which had caused government to loose Rs. 110 Billions as Tax.
as noted by Hindu Newspaper, Section 9(1)(i) to clarify that an asset or a capital asset being any share or interest in a company registered or incorporated outside India shall be deemed to be and shall always be deemed to have been situated in India if the share or interest derives, directly or indirectly, its value substantially from the assets located in India. Thus the amendment is not only expressly classificatory but even expressly retrospective. This is perfectly legal by all judgements of Supreme Court.
FM has stated that several companies who have paid earlier have already asked for refund after Vodafone judgement and more may follow. This, in fact, would lead to much greater instability than the stable situation that the amendment will bring for all time to come.
Vodafone on 04/17/2012 threatened to drag the government of India to international arbitration over retrospective tax legislation under the bilateral investment treaty (BIT) between India and the Netherlands.
Retrospective Tax Proposals are not being done for first time in the world. They are in fact part of Law making process and refining law to Protect interest of a country.
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