The Supreme Court on Tuesday dismissed the government’s review petition in the Rs 11,000 crore Vodafone tax case.
The government had filed a review petition asking the court to reconsider its verdict delivered in January which gave its order in favour of Vodafone and helped improve foreign investor confidence.
Finance Minister Pranab Mukherjee in the General Budget had proposed amendments in the Income Tax Act with retrospective effect from 1962 to bring into net overseas deals concerning domestic assets.
As per the proposed amendments, all persons, whether residents or non-residents, having business connection in India, will have to deduct tax at source and pay it to the government even if the transaction is executed on a foreign soil.
The amendments, once carried out, will have implications on Vodafone which won the Rs 11,000-crore tax dispute case against tax authorities in the Supreme Court. It will also impact other similar cases involving taxes to the tune of about Rs 30,000 crore.
Meanwhile, the Finance Ministry has allayed fears of negative impact of the proposed amendments on foreign direct investments.
|