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‘The Taxation Laws (Amendment) Bill, 2021’ was passed by the Lok Sabha Friday. When it is also passed by Rajya Sabha, all tax demands made on companies like Cairn Energy and Vodafone using a 2012 legislation on indirect transfer of Indian assets prior to May 28, 2012, will be withdrawn.
”On the withdrawal of the Retrospective Tax (Vodafone), I am glad that we have put an end to an issue that has been troubling us for 8 years,” Chidambaram said in a tweet.
The Finance Act 2012, which amended various provisions of the Income Tax Act, 1961 with retrospective effect, contained provisions intended to tax any gain on transfer of shares in a non-Indian company, which derives substantial value from underlying Indian assets, such as Vodafone’s transaction with Hutchison in 2007 or the internal reorganization of the India business that Cairn Energy did in 2006-07 before listing it on local bourses.
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