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The UPA Government will not wait for the Budget session of Parliament for making retrospective amendments to the income tax law, if its final view requires legislative changes, Finance Minister P. Chidambaram said here on Monday.
“Once we take a view (on the Parthasarathi Shome committee report), I see no reason why we should wait for the Budget session. We should move whatever changes have to be brought about in Parliament as early as possible,” he said at the Economic Editors’ Conference here.
The Shome Committee had submitted two reports to Chidambaram last week — one the final report on GAAR and the other, a draft report on retrospective changes to the income tax law.
Shome panel view
The Shome panel is understood to have criticised the retrospective amendments, introduced through Finance Act 2012. But, it has not recommended any undoing or scrapping of the amendments already legislated, it is learnt.
All that Chidambaram said on the draft Shome Committee report on retrospective legislation was that “We would have to complete the examination quickly and take a view.”
The Centre will have to take a call on whether it wants to dilute the provisions on retrospective changes, or only allow interest and penalty waiver on cases that involve indirect transfer of Indian assets and brought to tax by the latest amendments.
The Shome panel was asked to suggest measures to deal with the controversial retrospective amendment of the income tax law and tax treatment of cases such as the Vodafone-Hutch deal of 2007.
It was also asked to look at taxation of all non-residents, especially in the context of foreign institutional investors operating in India purely for portfolio investments.
Chidambaram said the Finance Ministry would, after taking stakeholder feedback, decide if any amendment to the income tax laws was needed, or explore any other way to resolve the matter.
He said that resolution of tax disputes — pending and anticipated — was good for the country, for the economy and for investments.
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