The Parliament has passed the Taxation Laws (Amendment) Bill, 2021. The bill seeks to do away with the contentious retrospective tax provision and will impact retro tax cases of Vodafone and Cairn Energy.
As part of the bill, the government has promised to refund taxes already collected and withdraw all litigation and arbitration. In return, companies have to give an undertaking that they will withdraw litigation in all forums, and will forgo any damages, interest or other costs.
Responding to a member question in Rajya Sabha on whether Cairn Energy or Vodafone will pursue any further appeals or arbitration after the enactment of the legislation, finance minister Nirmala Sitharaman said that discussions with the litigants will happen after the enactment of this law.
As per industry sources, Vodafone Group is planning to settle the dispute over retrospective application of tax on transfer of assets following the enactment of the bill. To this end, Vodafone will apply to the Indian government after the framework for settling such disputes is announced.
