Assuring UK that no new retrospective taxation cases will be invoked, India on Thursday told visiting British Foreign Secretary Philip Hammond that the tax case involving Cairn has to follow due process as the issue is already judicial.
Mr. Hammond is on a two day visit to India and met Finance Minister Arun Jaitley earlier in the day. Mr. Jaitley reiterated the government’s earlier stand that no new notices will be issued on retrospective taxation, he said and added that Jaitley “explained that this particular tax demand is being sent out pursuant to a notice that was issued by previous government.”
Earlier this week, Cairn Energy Plc was issued a USD 1.6 billion tax notice by the Income Tax Department with regard to alleged capital gains of Rs 24,500 crore it made in 2006 while transferring its India assets to a new company, Cairn India.
Asking India to remove all retrospective laws, Mr. Hammond said, “The country also has to set out clear signals that the business climate and business environment is predictable, stable and attractive for international investments.”
Documentary controversy
To a question if the controversy over the documentary “India’s Daughter” aired by BBC came up for discussion, Mr. Hammond said, “It is a private dispute between BBC and India. British government has no role to play in it” and added, “BBC is independent organisation. We have no control over what BBC says and does.”
On the issue of the multi-role aircraft deal in India worth about USD 30 billion, UK is still hopeful of a comeback if there is a chance indicated Mr. Hammond as “negotiations with Rafale have not gone smoothly…”. Though Rafale was shortlisted three years ago, final contract talks between India and France have been stuck over issues of pricing and work share arrangement.
