|Chennai||Rs. 27770.00 (-0.14%)|
|Mumbai||Rs. 29200.00 (2.31%)|
|Delhi||Rs. 27900.00 (-0.36%)|
|Kolkata||Rs. 28270.00 (1%)|
|Kerala||Rs. 27050.00 (-0.37%)|
|Bangalore||Rs. 27550.00 (1.66%)|
|Hyderabad||Rs. 27770.00 (-0.14%)|
The report of the committee appointed to look at General Anti-Avoidance Rules and retrospective taxation has been released by the finance ministry for further consultation. Panel chairman Parthasarathi Shome says a framework has been suggested and it is for others to now intepret and implement. Edited excerpts of an interview with Santosh Tiwari:
The retrospective tax amendments in the wake of the Vodafone case judgement had been seen as a major dampener of investor sentiment.
You mean the report should be seen in the perspective of individual cases?
This was a technical committee. We have looked at the taxation practices in different countries. Most countries do not have retrospective taxation and we have said that as a matter of policy, the government should avoid anything which surprises taxpayers. The committee has recommended that retrospective application of tax law should occur in exceptional cases and be confined to matters that are genuinely of a clarificatory nature or to protect the tax base by countering highly abusive tax planning schemes. It should not be used to expand the tax base.
What about the retrospective amendments done in the Union Budget this year?
We have said that retrospective application of a tax law should occur only after exhaustive and transparent consultation with stakeholders. The provisions relating to taxation of indirect transfer, introduced by the Finance Act, 2012, are not clarificatory in nature. These provisions should be applied prospectively, in the framework outlined in the report. However, in case the government opts for retrospective taxation, the capital gains tax should be taken from the entity which has made these gains and no penalty or interest should be levied.
What would be the implication of the recommendations on the Vodafone case?
The report is not about individual cases. You have to look at the recommendations to understand the implications for a particular case.