Taxation Laws (Amendment) Bill 2021 (Retrospective Taxation) | ECONOMY by VIVEK SINGH

Taxation Laws (Amendment) Bill 2021 (Retrospective Taxation)
In chronological order

1) In 2012, Govt. of India lost Vodafone tax case (in Supreme Court) related to its 2007 $11 billion acquisition of 67% stake in Indian mobile phone business by Hutchinson.

2) Subsequently, UPA Govt. brings in retrospective amendment to the Income Tax Act,1961 to overturn Supreme Court order.

3) The retrospective tax rule (which was an amendment to the Income-Tax Act, 1961) which received the President’s assent in May 2012, allowed the Govt. to ask companies to pay taxes on mergers and acquisitions and sale of assets (resulting in capital gain tax) that happened before that date (May 2012).

4) Through this retrospective taxation rule, Govt. raised a tax demand against "Carin Energy" also, which is a UK based company.

5) But then Cairn Energy moved to international arbitration (against this retrospective rule) in 2020 and Govt. of India lost international arbitration with Cairn recently. And a similar arbitration ruling is expected (arbitration is going on) in Vodafone case also over retrospective taxation in a similar case.

6) And because of the above two cases, the NDA Govt. had proposed to withdraw the infamous retrospective tax law, which hounded big foreign companies with billions of dollars of tax demands.

7) The "Taxation Laws (Amendment) Bill 2021" introduced in Lok Sabha yesterday, is basically on that line and will withdraw the law that allowed the government to raise tax demands with retrospective effect for the sale of assets before May 2012.

Those who are interested to know about the Vodafone and Cairn tax case can follow the link below but as such not required.
https://t.me/VivekSingh_Economy/2426
https://t.me/VivekSingh_Economy/3077