India today clarified the level playing field between domestic and foreign investors Prime Minister Manmohan Singh referred to yesterday did not relate to the capital gains tax issue in the Vodafone case.
“You are twisting it out of context,” Economic Affairs Secretary R Gopalan told reporters when asked whether Singh had Vodafone in mind when he talked of a level playing field. Gopalan said the taxation issues of Vodafone were different and not raised at summits like the G-20.
At the G-20 summit, Singh had yesterday said, “We are taking steps to revive investor sentiment. We are determined to create an environment that would boost investor sentiment and promote an atmosphere conducive to enterprise and creativity. Our policies will be transparent, stable and designed to provide a level playing field to both domestic and foreign investors.”
The Finance Bill in India contained provisions relating to retrospective amendments to the Income Tax Act, 1962, to bring foreign deals with underlying assets in India under the tax net. Vodafone’s deal to buy a majority stake in Hutchison Essar (now Vodafone India) in 2007 is one such deal.
