New Delhi: Finance Minister Nirmala Sitharaman on Monday said that the rules that will do away with the retrospective tax demands made on companies, such as Cairn Energy Plc And Vodafone plc will be ready soon.
Parliament earlier this month passed a bill to eliminate a tax rule that had empowered the tax department to go back 50 years and levy capital gains where ownership changed hands overseas, but business The property was in India.
The 2012 law was used to impose a total tax of Rs 1.10 lakh crore on 17 entities, including UK-based telecom giant Vodafone.
The bill provides for refund to the government retro tax companies provided all legal challenges are withdrawn.
Now rules have to be made for this, Sitharaman told reporters here. “Rules have to be made… Rules will soon be famous.”
The government has to refund around Rs 8,100 crore which it collected using the retro tax law. Most of it – Rs 7,900 crore cairn energy Lonely.
While in other cases, it did not take punitive measures to recover the tax demand, the Income Tax Department sold nearly 10 per cent stake of Cairn in its erstwhile Indian subsidiary and also forfeited its total dividend of Rs 1,140 crore and Rs 1,590 crore. Withheld tax refund of Rs. .
Cairn challenged the tax demand before an international arbitration tribunal, which in December last year overturned it and ordered the government to refund the money collected.
Vodafone had also decided a favorable arbitration against the tax of Rs 22,100 crore.
In both cases, the government appealed against the awards – in a Singapore court in Vodafone’s case and in The Hague in Cairn’s case. Singapore was the seat of Vodafone arbitration and so was The Hague in Cairn’s case.
Asked if the government would withdraw the challenge to the awards after the law is passed, Sitharaman said, “I will abide by the law passed in Parliament.”
“I will abide by the characteristics of the law. Nothing beyond that,” she said without elaborating.
The Finance Minister said that officials in his ministry are discussing closure, refund and settlement of retro tax cases with Cairn, Vodafone.
“I haven’t had any discussions with me so far,” he said.
The government’s refusal to honor the arbitration award resulted in Cairn taking action to recover that money through the confiscation of Indian assets abroad. In May, it took flag carrier Air India Ltd to a US court and last month a French court order to confiscate immovable assets belonging to the Indian government in Paris.
Cairn will have to withdraw those challenges to get the refund.
Some of the 17 companies that have faced tax demands retrospectively had moved the courts and would have to withdraw those challenges to close and settle the cases.
Parliament earlier this month passed a bill to eliminate a tax rule that had empowered the tax department to go back 50 years and levy capital gains where ownership changed hands overseas, but business The property was in India.
The 2012 law was used to impose a total tax of Rs 1.10 lakh crore on 17 entities, including UK-based telecom giant Vodafone.
The bill provides for refund to the government retro tax companies provided all legal challenges are withdrawn.
Now rules have to be made for this, Sitharaman told reporters here. “Rules have to be made… Rules will soon be famous.”
The government has to refund around Rs 8,100 crore which it collected using the retro tax law. Most of it – Rs 7,900 crore cairn energy Lonely.
While in other cases, it did not take punitive measures to recover the tax demand, the Income Tax Department sold nearly 10 per cent stake of Cairn in its erstwhile Indian subsidiary and also forfeited its total dividend of Rs 1,140 crore and Rs 1,590 crore. Withheld tax refund of Rs. .
Cairn challenged the tax demand before an international arbitration tribunal, which in December last year overturned it and ordered the government to refund the money collected.
Vodafone had also decided a favorable arbitration against the tax of Rs 22,100 crore.
In both cases, the government appealed against the awards – in a Singapore court in Vodafone’s case and in The Hague in Cairn’s case. Singapore was the seat of Vodafone arbitration and so was The Hague in Cairn’s case.
Asked if the government would withdraw the challenge to the awards after the law is passed, Sitharaman said, “I will abide by the law passed in Parliament.”
“I will abide by the characteristics of the law. Nothing beyond that,” she said without elaborating.
The Finance Minister said that officials in his ministry are discussing closure, refund and settlement of retro tax cases with Cairn, Vodafone.
“I haven’t had any discussions with me so far,” he said.
The government’s refusal to honor the arbitration award resulted in Cairn taking action to recover that money through the confiscation of Indian assets abroad. In May, it took flag carrier Air India Ltd to a US court and last month a French court order to confiscate immovable assets belonging to the Indian government in Paris.
Cairn will have to withdraw those challenges to get the refund.
Some of the 17 companies that have faced tax demands retrospectively had moved the courts and would have to withdraw those challenges to close and settle the cases.
.