ICC, BIAC write to Pranab on retrospective tax amendment issue

Concerned over the impact of the government's decision to amend the Income Tax Act with retrospective effect, the International Chamber of Commerce (ICC) and another industry body BIAC want to engage with the finance ministry to workout a solution to the issue.

"Dialogue is the best forum to solve differences of view. Let us work together to find a solution which raises necessary revenues while maintaining India’s good climate for investments," they have said in a letter to finance minister Pranab Mukherjee.

While ICC represents about 1,00,000 companies spread over 130 countries, BIAC represents OECD's business community. They have raised the concerns about the impact of Mukherjee's Budget proposal to amend the I-T Act with retrospective effect to bring into tax net Vodafone-type merger and acquisition deals involving domestic assets.

 

UK-based Vodafone, which in 2007 bought Hong Kong-based Hutchison's telecom business that included India assets for $11 billion, has attracted tax of Rs 11,000 crore. "Our organisations are ready to discuss with you and your staff how best to approach the balance between the financial needs of your country, as exemplified by the unexpected retroactivity of tax rules, and the optimal position of your country in attracting new investments not only by foreign investors (FDI) but also by investors resident in your country," the letter said.