[ad_1]
Cairn Energy, Vodafone and other companies looking to settle retrospective tax disputes will have to indemnify the Indian government against any future claims arising out of the said dispute.
This will be in addition to their own undertaking to withdraw any pending litigation or proceeding before any forum and assurance that they won’t pursue any further claims in the future.
The indemnity bond will have to be furnished by the company and any other interested party with the income-tax authority and it’s resolution panel, according to the Central Board of Direct Taxes (CBDT).
Under the new mechanism, companies can now settle their cases within 30-60 days.
The CBDT specified 9 terms explaining the rules after considering detailed feedback from the companies and other stakeholders.
Six of these conditions say that the companies concerned will irrevocably withdraw, discontinue and not pursue any law suits, arbitration, conciliation or mediation either in India or abroad.
A company will also have to withdraw proceedings in respect of any award against the government and all Indian affiliates.
While two conditions are related with a structure for dealing with possible litigations in future, the final condition concerns public declaration.
“The declarant and all the interested parties shall indemnify, defend and hold harmless the Republic of India and Indian affiliates from and against any and all costs, expenses (including attorneys’ fees and court’s fees), interest, damages, and liabilities of any nature arising out of or in any way relating to the assertion or, bringing, filing or maintaining of any claim, at any time after the date of furnishing the undertaking,” one of the conditions says.
Another condition says, “The declarant and all the interested parties shall refrain from facilitating, procuring, encouraging or otherwise assisting any person (including, but not limited to any related party or interested party) from bringing any proceeding or claims of any kind related to any relevant order or orders, or in relation to any award, order, judgment, or any other relief against the government or Indian affiliates in connection with any relevant order or orders.”
Indian affiliate is any department, agency, instrumentality, public sector company or any other entity of the government owned directly or indirectly in India or abroad.
The interested company can start the process by submitting the undertaking within 45 days effective October 1. Post that the tax authority will have 15 days to pass an order.
The government had during the monsoon session amended retrospective rules nullifying tax demands raised on transactions prior to May 28, 2012, which is when the controversial law came into force.
Once these conditions are fulfilled, the government will refund the tax amount paid by the companies, without interest and penalty.
Dear Reader,
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.
Digital Editor
[ad_2]
Source link
