Govt releases conditions to enable withdrawal of retro tax demands

[Navjot Singh]

Withdrawal of retro tax demands: ‘Irrevocable’ undertaking by cos to drop cases against government

Earlier this month, the Centre had brought in The Taxation Laws (Amendment) Act 2021 stating that no tax demand shall be raised for any indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012.

indianexpress.com

In a move that will aid closure of retro tax demands against companies such as Cairn Energy and Vodafone PLC, the Income Tax Department on Saturday released draft of rules to drop such demands provided companies concerned give an “irrevocable” undertaking to withdraw all legal cases against the government as well as undertake not to pursue any in future.

Scraping such demands, the government undertook to refund Rs 8,100 crore it had collected from companies to enforce the retro tax demand. A bulk – Rs 7,900 crore – is due to Cairn Energy of UK alone. This was to be done only if the companies concerned gave an undertaking to withdraw all present legal challenges as well as not take such recourse in the future.