The Securities and Exchange of Board of India (Sebi) chairman UK Sinha on Tuesday raised foreign investors’ concerns on retrospective taxation, saying global players need assurances about India’s tax-friendly regime.
“We have to be very mindful that whatever we do, it shouldn’t be a negative surprise for those who have invested in the country. Retrospective implementation of laws is something we should frown upon,” he said while speaking at the Gateway of India dialogue.
“If there is one protection to the domestic investors, same level of protection should be available to them (foreign investors),” Sinha added.
“Should there be an element of reciprocity or not? Can one country impose its will over others without caring for reciprocity,” Sinha said, adding that: “Unfortunately the current situation is that where reciprocity is not adequate.”
Finance Minister Arun Jaitley has tried to assure investors on several occasions that there will be no retrospective taxation in future.
However, companies such as Cairn and Vodafone are still fighting cases in court with respect to retrospective tax notices served to them in the past.
However, the market regulator who recently returned from a visit to the US, added that foreign investors continue to remain optimistic on India’s growth prospects, when compared with other economies in the region. Foreign institutional investors, who sold off sharply in January-February, bought shares worth over Rs.10,000 crore in April and May.Observing the need to have a strong Asian market, Sinha said that in 2003 there was serious attempt at building one.
“We must blame ourselves that we could not move forward. So savings of entire Asia is going into other jurisdictions and the requirements of Asia are not being,” he said.
Hindustan Times New Delhi,15th June 2016
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