Vodanfone issue: HSBC seeks ‘tax clarity’ from governmentApril 12th, 2012 - 7:52 pm ICT by IANS
Kolkata, April 12 (IANS) HSBC, Europe’s biggest bank, Thursday sought “tax clarity” from the government in the backdrop of Finance Minister Pranab Mukherjee’s statement there was “no other way” but to amend the Income Tax Act to bring into the net Vodfone-type cross-border deals.
The government’s move to retrospectively tax overseas transactions “clearly opens up debate…The Vodafone issue is really more to clarify,” Naina Lal Kidwai, Country Head India, Director HSBC Asia Pacific, told reporters here.
“I think the problem for the future is tax clarity…all investors want tax clarity,” Kidwai stated.
Earlier, two international trade bodies, International Chamber of Commerce and the Business and Industry Advisory Committee to the OECD, have sought a review of the government’s move to retrospectively tax overseas transactions involving Indian assets. They have together written to the finance ministry, cautioning that the government’s proposal in the budget for 2012-13 could have adverse implications for the country.
“The whole noise that is happening, is not happening because of Vodafone…it is happening because of retrospective regulations,” Kidwai said.
She said the concern for the Indian industry was the power that the government was going to entrust to tax assessment officers.
“In order to raise the revenue, the government should not end up causing problem (for industry),” she said.
The finance minister had recently said there is “no other way” but to amend the Income Tax Act with retrospective effect to bring into the net Vodfone-type cross-border deals.
Mukherjee in his 2012-13 budget has proposed to amend the 1962 Income Tax Act with retrospective effect, a move that evoked a sharp reaction from Vodafone, which said any move by the government to retrospectively change the tax regime was grossly unjust. It said the proposed change contradicted the conclusions of the Supreme Court on the issue.
The apex court had held that Vodafone was not liable to pay Rs.11,000 crore as tax on its $11.2 billion acquisition of 67 percent stake in Hutchisson Essar from Hong Kong-based Hutchison Telecom as the deal was done between two foreign entities overseas.
- Pranab defends amending IT Act to deal with Vodafone-type deals - Mar 31, 2012
- Britain raises Vodafone tax issue with Mukherjee (Lead) - Apr 02, 2012
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- Tax law change may yield Rs.40,000 crore: Government - Apr 24, 2012
- Tax law amendments not aimed at opening old cases: Mukherjee - Mar 25, 2012
- Proposed tax law change 'clarificatory', says Pranab - Apr 20, 2012
- Panel set up on international taxation - May 03, 2012
- Vodafone was told about tax liability in Hutchison deal - May 02, 2012
- Government to amend law to tax Vodafone-type deals - Mar 16, 2012
- India not a tax haven: Pranab - Apr 01, 2012
- India defers GAAR by a year (Lead) - May 07, 2012
- Committed to the reforms process: Pranab - Mar 17, 2012
- Tax law change 'scaring' overseas investors: Karan Bilimoria (Interview) - Apr 15, 2012
- Tax cases settled before April 1 won't be reopened: Mukherjee - May 30, 2012
- Government hasn't directed reopening Vodafone-type cases: Palanimanickam - May 08, 2012
Tags: assessment officers, cross border, finance minister, finance ministry, hellip, hsbc, income tax act, industry advisory committee, international chamber of commerce, naina lal kidwai, oecd, overseas transactions, pranab mukherjee, retrospective effect, tax assessment, tax clarity, tax regime, trade bodies, vodafone, vodfone