UPDATES ON RETROACTIVE TAX

ByShobhit Bhatnagar 12MBA042

Meaning
2

The adjective retroactive refers to something happening now that affects the past. Thus, a retroactive tax is one that is passed at one time, but payable back to a time before the tax was passed. This is often viewed as an unfair practice.
11/21/2012

Instigating Issue
3

In 2007, Vodafone acquired Hutchison Essar for USD 11.2 billion in Cayman Islands The dispute was whether or not the Indian IT Department has jurisdiction over the transaction In 2012, the Indian Supreme Court passed the judgment in favor of Vodafone Subsequently, India altered its IT Act 11/21/2012 retroactively

Recent Developments
4

The new FM P Chidambaram asked tax expert Parthasarathi Shome to look into the retrospective amendment to tax laws On 9th October, the Shome panel said that the tax provisions should be applied prospectively rather than retroactively Also, the panel said that retroactive taxation of corporate deals should be applied in the rarest of rare cases
11/21/2012

Recent Developments (contd.)

5

The government might waive off penalties & interest on Vodafone thus the telecom giant will have to pay Rs. 8,000 crore in taxes On 11th October, the government announced that it is will take a final view on the Shome panel report by 15th November
11/21/2012

THANK YOU