Burying the ghost of retrospective taxation shri radhey.

Amid the disruption in the Parliament, the Narendra Modi government introduced a bill, on Thursday, aimed at correcting a momentous blunder in the contemporary history of taxation laws.

This blunder pertains to the Manmohan Singh government’s notorious retrospective amendment in the Income Tax Act in 2012. After losing a tax dispute to Vodafone on the issue of taxation on indirect transfer of Indian assets, the government nullified the judgement by altering Section 9(1)(i) of the Income Tax Act retroactively. Taxing indirect transfer of Indian assets implies taxing the gains arising out of the transfer of shares by a non-resident in a company incorporated abroad, if the share derived its value, directly or indirectly, substantially from assets located in India.

This regressive legislative development, later extended to Cairn Energy’s internal restructuring, triggered a spate of legal disputes. Vodafone and Cairn Energy sued India before investor-State dispute settlement (ISDS) tribunals constituted under the India-Netherlands and the India-United Kingdom bilateral investment treaty (BIT).

Shri Radhey Shri Radhey Shri Radhey Shri Radhey