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The Economic Times/ - News, Sáb, 31 de Março de 2012
CLIPPING INTERNACIONAL (Supreme Court)
Pranab Mukherjee defends amendment of
IT Act with retrospective effect
KOLKATA: Finance Minister Pranab Mukherjee today
defended the move to amend the Income Tax Act with
retrospective effect following which UK's Vodafone
may have to pay Rs 11,000 crore as tax for a buyout
deal involving Indian business.
"First the Supreme Court told in the Vodafone case
that it has to be clearly indicated the intention of the
legislature how it is going to tax," Mukherjee said at an
interactive session organised by Calcutta Chamber of
Commerce.
"We came to the conclusion that we will not be able to
tax on Indian assets purchased outside the country,"
he added.
UK-based mobile operator Vodafone purchased Hong
Kong-based Hutchison's telecom business, which
included operations in India, in 2007 for about USD
11.2 billion.
Indian income tax authorities said the deal will attract
tax on it and sought Rs 11,000 crore from Vodafone,
which challenged the move.
The Supreme Court ruling held that Vodafone wasn't
liable to pay tax on the deal, following which the
government has proposed to amend the tax laws
retrospectively to bring in the net such deals.
"I will now pose few questions. We will have to decide
whether India will be a no tax country or India will tax
... If the answer is yes that it will be taxed, then
whether to be taxed in India or at source of the
company. Then comes the question how it is being
protected from Double Tax Avoidance Agreement and
tax exchange information in India", Mukherjee said.
The legal remedy lay in bringing clarificatory
amendments and make clear the intention of the
legislature, he added.
"If I want to clarify the intention of the legislature in
respect of particular section passed in a particular
year, the relevant year is only that year," he said.
"But this does not mean that it gives the opportunity to
reopen the cases from 1962. There is the other
provision that no IT cases can be re-opened beyond
six years," the Union Finance Minister said.
The Income Tax Act came into force from 1962.
Mukherjee also said he had instructed the officers to
examine the transfer pricing mechanism so that no one
was harassed.
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