Revenue Secretary Tarun Bajaj said that 14 companies against whom retrospective tax demand was made have approached the government to settle the cases.
In August the government enacted a law to do away with all retrospective taxation imposed on indirect transfers of Indian property. The rules under the law seek to roll back tax demands made using the 2012 retrospective law to tax indirect transfers of Indian property and to refund the amount paid in these cases without any interest.
Speaking to PTI, Bajaj said that of the 17 companies against whom retrospective tax demands were made, barring three or four entities, all have given an undertaking to the government to resolve the cases.
“All of them have contacted. There were 17 cases, of which 3,4 had no trace. We even sent the order in email, we never got any response. The rest 14, except 1 who still have time Has filed, the rest have filed… Cairn, EarlyGuard has come (for settlement),” he said.
With regard to Vodafone, Bajaj said the UK-telecom company has till the end of the month to file for settlement. “For some the change (in tax laws) was done through the IT Act, for some the change was done through the Finance Act.”
He said the company, for which the changes were made through the Finance Act, has till the end of the month to file for settlement.
On October 1, the Finance Ministry had notified rules stipulating that companies would have to withdraw any pending litigation or proceedings before any forum against retrospective taxation and also to give an assurance that they would not be able to do so in future. No one else will claim. ,
In addition, the companies and any other interested party were required to furnish an indemnity bond not seeking damages from the Government of India or its affiliates.
Later on 13 October, the ministry notified a new set of rules to facilitate the settlement of retrospective tax disputes with British telecom giant Vodafone Plc.
The ‘Exemption of Recognition (Section 119 of the Finance Act, 2012) Rules, 2021’, lays down the form and conditions for a declaration to be filed by a company to settle its case.
Vodafone had 45 days to approach the government for a settlement.
The case relating to Vodafone is different as the taxes were demanded from the company by validating the IT department’s October 2010 order. 11,218 crore in taxes from a British firm on the acquisition of Hutch-Essar through a deal in the Cayman Islands in 2007.
The Supreme Court had in January 2012 rejected the demand for the tax, but sought to revalidate it through Section 119 of the Finance Act, 2012. Rs 7,900 crore was also demanded from Vodafone.
When asked how soon the disputes would be resolved, Bajaj said, “Cairn is working on it… Now the ball is in their court. As soon as they withdraw the cases, we will give them the checks. In cases where No money will be refunded, there will be faster settlement.”
The Taxation Laws (Amendment) Bill, 2021, enacted in August, does away with the tax rule that gave the tax department 50 years ago the power to go and capitalize wherever the ownership changed overseas but the business assets were in India. Benefit levied.
The 2012 law was used to levy a cumulative fee of 1.10 lakh crore tax on 17 entities, including Vodafone, but substantial punitive action was taken in the case of Cairn itself.
Last week PTI had reported that Cairn Energy Plc had earlier this month given the Indian government the necessary undertakings to indemnify against future claims as well as agree to drop any legal proceedings anywhere in the world. .
The government has now accepted this and has issued a so-called Form-II to Cairn, which is committed to refund the tax collected to implement the retrospective tax demand, said two sources with direct knowledge of the development. .
After the release of Form-II, Cairn will now start withdrawing all cases in international courts. Once this is completed, the company will be issued a 7,900 crore refund.
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