The Central government has notified rules for implementing the 'Taxation Laws (Amendment) Bill, 2021'.
About:
Accordingly, the amendment bill notified on October 1, 2021, will enable the scrapping of the contentious retrospective tax demand provisions.
It was passed by the Parliament in the Monsoon Session. Significantly, the notification of the bill is expected to end the much stretched tax disputes with UK's Cairn Energy, and Vodafone Plc.
The Bill has amended the Income Tax Act, 1961 so as to provide that no tax demand shall be raised in future on the basis of the said retrospective amendment for any indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012 - when the finance bill was passed by the Parliament in 2012.
The 2021 Act also provides that the demand raised for offshore indirect transfer of Indian assets made before May 28, 2012 shall be nullified on fulfillment of specified conditions.
Besides, the amount paid or collected in these cases shall be refunded, without any interest.
This Bill would give Cairn Energy and Vodafone Plc a window to do away with the arbitrations and settle their long-drawn tax disputes with the government.
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