FinMin to give clarification to PMO on retro tax amendments | Day ...

FinMin to give clarification to PMO on retro tax amendments

A day after Prime Minister Mamohan Singh raised concerns over tax matters, the Finance Ministry today said it will provide clarifications to the PMO in two-three weeks on the issues, including the retrospective tax amendment which requires Vodafone to pay Rs 20,000 crore. ?Prime Minister?s Office (PMO) sought clarifications on taxation issues and Section 9 of Income Tax Act (related to tax on indirect transfer of assets)?. We asked them to give us two-three weeks time,? Finance Secretary R S Gujral told reporters.

He ruled out any plans to further defer implementation of General Anti-Avoidance Rules (GAAR), which had evoked sharp reactions from both domestic and foreign investors.

The government had already postponed the Budget proposal of implementing GAAR by one year to April, 2013. The Finance Ministry, Gujral said, would issue draft guidelines on GAAR for public comments shortly. The decision of former Finance Minister Pranab Mukherjee to amend the Income Tax Act with retrospective effect to tax overseas deals involving domestic assets had generated a lot of controversy. Ignoring the criticism, Mukherjee went ahead with the proposal which now had become a part of the statute. The changes will have direct implications on the British telecom major Vodafone though it won the tax case in the Supreme Court.

Yesterday, Singh, who took charge of the finance portfolio after Mukherjee resigned to contest the Presidential election, held meetings with key economic advisrrs and underlined the need for reversing the climate of pessimism and regenerating the ?animal spirit? in the economy.

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