10/05/2012 - Myclipp

Retrospective law
The Lok Sabha has passed the Finance Bill without
any change or modification on ?retrospective effect' in
the Vodafone case. How can the company be asked to
pay taxes with interest and penalty for an action that
preceded the existence of the law? As on the date of
the transaction, its tax liability as decided by the
Supreme Court is nil. The image of the country is at
stake in the global financial markets, especially when
foreign direct investment is needed for India's
economic development.The Finance Minister says that
if foreign countries wish to invest in India, they must
pay taxes. Yes, but one should not be asked to pay
taxes for past transactions, when there was no tax
liability.Tax evasion is illegal, but tax
avoidance-planning within framework of laws is
allowed to reduce tax liabilities.In the interest of
revenue, such transactions can be taxed either from
the date of notification, or from the next financial
year.The best course of action is not to change laws
with retrospective effect at all, especially if they
increase financial tax liability for the past period(s).Still,
there is time to drop this amendment, as the Finance
Bill has not yet obtained the assent of the President.
Or, drop it in the next Finance Bill with retrospective
effect?Mahesh Kapasie-mailBreaking up euroEven as
the ?Euro Zone crisis' seems to be intensifying by the
day , it is really perplexing that an eminent authority on
international financial matters, Paul Krugman, should
consistently advocate "breaking up the euro''!
(Business Line, May 8). The consequent dislocation,
albeit for short periods, and the pain to be undergone
while readjusting to different currencies in the changed
set-up may become unbearable.K. GopalanBangalore
Business Line/ - Markets, Qui, 10 de Maio de 2012
CLIPPING INTERNACIONAL (Supreme Court)
12