Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
Popular Search: ARTICLES ON INPUT TAX CREDIT IN VAT :: Central Excise rule to resale the machines to a new company :: empanelment :: cpt :: ACCOUNTING STANDARD :: VAT RATES :: list of goods taxed at 4% :: TDS :: VAT Audit :: TAX RATES - GOODS TAXABLE @ 4% :: ACCOUNTING STANDARDS :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: form 3cd :: articles on VAT and GST in India :: due date for vat payment
Direct Tax »
  CBDT signs 5 advance pricing pacts with Indian taxpayers
 Salaried taxpayers to get SMS alerts on TDS deductions
  CBDT issues second round of Certificates of Appreciation to tax payers for their contribution towards Nation building
 CBDT unveils norms for computing FMV of trust assets
 CBDT starts issuing second round of Certificates of Appreciation to tax payers
 Income Tax Department Launches SMS Alert Service on TDS Deductions
 Salaried taxpayers to get SMS alerts for TDS deductions
 Salaried tax payers to get SMS alerts on TDS deductions
 Mumbai zone direct tax collection flat in H1 FY17
 CBDT issues final rules for taxing share buy back by companies
 CBDT issues final rules for taxing share-buyback

Tax demand on Vodafone, Cairn cannot be disputed: CBDT
March, 03rd 2016

Asserting that the tax demand against them has been "rightly generated", the CBDT today said companies like Vodafone and Cairn Energy should promptly avail the one-time dispute resolution scheme announced in the Budget to close the issue by paying the principal tax and getting waiver on interest and penalty.

CBDT Chairman Atulesh Jindal said "as long as" the retrospective amendment of the IT Act passed by Parliament remains valid, the "demand (of tax against them) remains valid."

Jindal, in an interview to PTI, said apart from UK's Vodafone Group plc and Cairn Energy plc, there are about a dozen more such companies which are facing similar demands due to the retrospective amendment of the Income Tax Act.

"They (companies) are basically challenging the retrospective amendment. Retrospective amendments have been passed by Parliament. They have not gone against passing of retrospective amendment before any, as long as the retrospective amendment is valid, the demand (of the IT department) remains valid.

"Of course, it (demand) very much remains and this is a rightly generated demand," he said.

Finance Minister Arun Jaitley, in his Budget speech yesterday, announced a new dispute resolution mechanism for such companies who are in confrontation with the taxman's action.

"In order to give an opportunity to the past cases which are ongoing under the retrospective amendment, I propose a one-time scheme of Dispute Resolution for them," Jaitley had said while presenting the Budget for 2016-17 in Parliament.

The scheme entails paying up of the principal tax by the company that has been served with a tax notice and at the same time getting a waiver on interest and penalty.

The CBDT boss said government has always made it clear that tax disputes "are not" covered under the Bilateral Investment Promotion and Protection Agreement (BIPA).

"It is a different matter that they (companies) have gone under BIPA and our stand is that tax disputes are not covered under BIPA. That's the situation. Hence, a sort of opportunity has been given to settle these disputes (in the Budget)," the Central Board of Direct Taxes (CBDT) Chairman said.

He said the department cannot go back on the tax demand raised against these firms as assessment orders were "already passed" and "demands raised" before the IT Act was amended with a retrospective effect.

When told that the companies involved have not shown much initial enthusiasm to the proposal, Jindal said he is hopeful and thinks "they (companies) should come forward."

Commenting on the Budget proposal, Cairn spokesperson had said that "while international arbitration proceedings have commenced to seek resolution of the tax dispute, Cairn notes the efforts of the Government of India to resolve the retrospective tax issue and will study the text of the Budget speech."

A Vodafone spokesperson had said: "We will of course study the details of what the Finance Minister has proposed today, while continuing to seek resolution of this matter through international arbitration.

"Vodafone has always maintained that there was no tax to pay at the time it completed its acquisition of Hutchison business in 2007... Vodafone was the acquirer in this transaction. The company made no capital gains whatsoever."

While Cairn Energy is facing a tax demand of Rs 10,247 crore on a 2006 business re-organisation it carried out in its India unit before getting it listed, Vodafone is facing tax liability over its USD 11 billion acquisition of a 67 per cent stake in the mobile-phone business owned by Hutchison Whampoa in 2007.

Jindal said a few of the other such cases of indirect transfer of assets coming under the ambit of the retrospective amendment where IT demands have not been raised but proceedings are pending due to reasons like 're-opening' of the case or some other procedure, will have to go through the "approvals" and "clearances" of a Budget announced committee which will be headed by the Revenue Secretary and have the CBDT Chairman as a Member.

When the Finance Minister was yesterday asked if government hopes to arrive at the desired settlement, when the involved companies are disputing the principal liability in first place, he had said: "They have two options - either to litigate or settle."

Home | About Us | Terms and Conditions | Contact Us
Copyright 2016 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Article Management Solutions System Article Management Software S

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions