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Government took seven years to scrap retro tax because of ongoing court cases, says FM

Sitharaman said it was in line with the “commitment of BJP” which did not believe in the retrospective application of tax.

Published: 07th August 2021 11:06 AM  |   Last Updated: 07th August 2021 11:06 AM   |  A+A-

Union Finance Minister Nirmala Sitharaman (Photo | EPS, Shekhar Yadav)

By Express News Service

NEW DELHI:  Finance minister Nirmala Sitharaman on Friday said that the government has to wait for seven years to scrap the retro tax as many cases were sub-judice at various platforms, the government could not make legislative changes and had to wait for their logical conclusion in courts.

Sitharaman said it was in line with the “commitment of BJP” which did not believe in the retrospective application of tax. “As promised by Arun Jaitley, in principle we do not believe in this. However, we couldn’t act on this in 2014 because there were two cases going on,” Sitharaman said.

According to Sitharaman, the government waited for them to reach a logical conclusion which was arrived in September 2020 in one case and in December 2020 in another. The Taxation Laws (Amendment) Bill, 2021 was finally passed by Lok Sabha without any discussions. 

Although delayed, the Bill is likely to help in settling disputes with Cairn Energy, Vodafone Group and 15 other companies over retrospective tax demands raised by the Union government. As the Bill says that it does not involve any expenditure, recurring or non-recurring, from the Consolidated Funds of India, finance ministry officials have suggested that the refunds involved in settling the disputes is likely to happen from the gross direct tax receipts.



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