Tax Amendment Bill makes it clear that no tax demand will be raised for any indirect transfer of Indian assets undertaken prior to May 28, 2012
Tax Bill Amendment: Amidst a row of protests by the opposition over issues like the Pegasus Spygate and Farm laws, the Lok Sabha has given nod to the controversial retrospective tax bill.
As proceedings started at 11:00 am on Friday with speaker Om Birla in the Chair, the Question Hour Convened. However, Opposition leaders resorted to sloganeering over the Pegasus Spygate and the controversial Farm Bills that have been the subject of the Farmer protests for about a year now. 15 minutes into the proceedings with the Speaker urging the protesting lawmakers to go back to their seats, he was forced to adjourn proceedings till noon. Tax Amendment Bill
The house resumed proceedings afternoon with Rajendra Agrawal in the Chair. Agrawal allowed discussions on ‘The Taxation Laws (Amendment) Bill, 2021’, which proposed amendments to the Income Tax and Finance Act 2012. The amendment was introduced with the intention of making it clear there will be no tax demand raised for any indirect transfer of Indian assets, provided that the transaction was undertaken before May 28, 2012.
The Tax Amendment Bill
The bill states 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.”. This is the date on which the Finance Bill, 2012 had received the assent of the President of India. Tax Amendment Bill
Addressing the house regarding the bill, Finance Minister Nirmala Sitharaman said, “Keeping up the commitment of BJP that we don’t believe in the retrospective application of tax, we are fulfilling that word by bringing this amendment”.
Notably, the Taxation Laws (Amendment) Bill 2021 was introduced shortly after the Cairn Energy Plc. cases regarding retrospective tax demand that India lost. The passage of this bill by the Rajya Sabha is expected to have a monumental impact on cases like these.
The bill also states that any demand raised for “indirect transfer of Indian assets made before May 28, 2012, shall be nullified on fulfillment of specific conditions such as withdrawal or furnishing of undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for cost, damages, interest, etc shall be filed.”
Alongside the Tax Amendment Bill, the lower house also the bill to set up a University in the Union Territory of Ladakh. It was ‘The Central Universities (Amendment) Bill, 2021′ that proposed to set up a central university in Ladakh. It was passed by the House following a brief statement by Education Minister Dharmendra Pradhan.