NEW DELHI: As the government notifies retro tax settlement amendment, companies like Cairn, Vodafone, others, will get their refund within five months, with a rider that they would not claim any refund in future from the Indian government.
According to rules notified by the government to settle disputes arising from seeking back taxes, the companies will have to withdraw any pending litigation or proceeding before any forum against the levy of the retrospective tax and also give an assurance that they would not pursue any claims in the future.
In addition, the companies and any other interested party will have to furnish an indemnity bond committing not to seek damages from the Indian government or its affiliates.
“The declarant and all the interested parties shall indemnify, defend and hold harmless the Republic of India and Indian affiliates from and against any and all costs, expenses (including attorneys’ fees and court’s fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of any claim, at any time after the date of furnishing the undertaking,” one of the conditions says.
The Ministry of Finance on October 1 notified rules.
According to the timelines in the rules, the initial submission of an undertaking to withdraw pending legal proceedings has to be done in 45 days.
Thereafter the relevant Principal Commission of income tax has to give a certificate accepting or pass an order rejecting the claim in 15 days from the receipt of the application.
Companies will have to file a declaration along with a board resolution or legal authorisation besides an indemnity bond, the rules said.
After grant of certificate, the companies will have to, within 60 days, fulfil the condition of indemnity by all interested parties.