Finance Minister's advisor Parthasarathi Shome said the government should not use retrospective amendment of tax laws to raise revenues. He was hinting at the long-pending dispute between Vodafone and Indian tax authorities.
"We have to take away risk and uncertainty. We can't use retrospective amendment of tax laws to raise revenue. I have always given example of Brazil and Sweden where they have constitutionally removed retrospective taxation," Shome said without referring to the tax dispute between Vodafone and the Income Tax department.
A committee was set up under Shome to recommend measures to deal with the retrospective amendment of income tax laws and suggest ways of treating taxation cases which involve indirect transfer of Indian assets, of the likes of the Vodafone-Hutchison deal.
The committee had recommended last year that either the retrospective tax amendment should be withdrawn or penalty/ interest, if covered under taxes should be waived off.
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