The government will give 45 days to companies to drop all claims and seek a settlement of the controversial retrospective tax claims relating to the overseas sale of Indian assets once the final settlement rules are notified, a report in LiveMint said.
The aim is to conclude the process in three to five months, depending on the current status of the dispute, the report said, adding the process is expected to take longer in instances where companies have initiated appeals, arbitration, or arbitral award enforcement measures.
Earlier this month, the Taxation Laws (Amendment) Bill was passed, which retrospective tax. The Taxation Laws (Amendment) Bill, 2021 seeks to amend the Income-Tax Act, 1961 so that no retrospective tax demand shall be raised on any indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012 (that is, the date on which the Finance Bill, 2012 received the President’s assent).
There are 17 affected companies and the government is reaching out to withdraw cases from various judicial levels and derive the benefit of the legal correction.
"Pursuant thereto, income-tax demand had been raised in 17 cases. In two cases assessments are pending due to stay granted by High Court," the objects of the Bill said.
Out of the 17 cases, arbitration under Bilateral Investment Protection Treaty with the United Kingdom and the Netherlands had been invoked in four cases.
"In two cases, the Arbitration Tribunal ruled in favour of the taxpayer and against the Income Tax Department," it said in a reference to arbitration awards won by Cairn and Vodafone.
