Skip to main content

CBDT to waive interest if tax demand paid in retro cases

By
The tax department will waive interest liability if the principal demand of capital gains tax is paid by companies like Cairn India and Vodafone plc.
The Central Board of Direct Taxes (CBDT) on March 24 issued a circular for waiver of interest in disputed tax demand in different scenarios.
In cases where tax liability arose because of retrospective amendment to the law or a court ruling, the interest payable on the demand will be waived, it said.
"However, no reduction or waiver of such interest shall be ordered unless the principal demand... stands fully paid or satisfactory arrangements for payment of the principal demand have been made," CBDT guidelines to Chief Commissioner of Income Tax and Director General of Income Tax said.
The guidelines came seven weeks after the Direct Tax Dispute Resolution Scheme, announced by Finance Minister Arun Jaitley on February 28 last year, closed.
The scheme, which closed on January 31, provided for waiver of interest and penalty if the principal amount involved in retrospective tax cases is paid and all appeals against the government challenging constitutional validity of back-dated amendment to Income Tax laws are withdrawn.
Vodafone faces Rs 14,200 crore tax bill for failing to collect taxes when it paid $11 billion to acquire Hong Kong-based Hutchison Whampoa's 67 per cent stake in India mobile-phone business in 2007.
UK's Cairn Energy plc has been slapped with over Rs 29,000 crore in tax demand including Rs 10,247 crore in principal due, for alleged capital gain it made in 2006 when it transfered its India business into a new subsidiary, Cairn India, and got it listed.
Simultaneously, the tax department also raised a tax demand of Rs 20,495 crore on Cairn India for failing to deduct withholding tax on alleged capital gains made by its erstwhile parent company Cairn Energy in 2006-07 when it reorganised India business.
While the tax scheme that closed on January 31 primarily targeted Cairn Energy and Vodafone, the new guidelines will be applicable for Cairn India as well as Vodafone.
Neither Cairn Energy nor Vodafone participated in the scheme that closed on January 31 and have dragged India to arbitration contesting the demands.
The tax department in the guidelines said the cases where the interest can be waived include ones where tax was not deducted because of an order passed by the High Court but the same has been reversed by "any retrospective amendment of law or a decision of the Supreme Court of India or a decision of a larger bench of the jurisdictional High Court."
Earlier this month, tax tribunal ITAT upheld levy of Rs 10,247 crore capital gains tax on UK's Cairn Energy Plc but has held that interest cannot be charged on it as the demand was raised using retrospective tax legislation.
Business Standard New Delhi,27th March 2017

Comments

Post a Comment

Popular posts from this blog

Credit card spending growth declines on RBI gaze, stress build-up

By
  Credit card spends have further slowed down to 16.6 per cent in the current financial year (FY25), following the Reserve Bank of India’s tightening of unsecured lending norms and rising delinquencies, and increased stress in the portfolio.Typically, during the festival season (September–December), credit card spends peak as several credit card-issuing banks offer discounts and cashbacks on e-commerce and other platforms. This is a reversal of trend in the past three financial years stretching to FY21 due to RBI’s restrictions.In the previous financial year (FY24), credit card spends rose by 27.8 per cent, but were low compared to FY23 which surged by 47.5 per cent. In FY22, the spending increased 54.1 per cent, according to data compiled by Macquarie Research.ICICI Bank recorded 4.4 per cent gross credit losses in its FY24 credit card portfolio as against 3.2 per cent year-on-year. SBI Cards’ credit losses in the segment stood at 7.4 per cent in FY24 and 6.2 per cent in FY23, the...
Post a Comment
Read more

SFBs should be vigilant, proactive to mitigate risks: RBI deputy guv

By
  The Reserve Bank of India’s Deputy Governor Swaminathan J on Friday instructed the directors of small finance banks (SFBs) to be vigilant and proactive in identifying emerging risks in the sector.Speaking at a conference for directors on the boards of SFBs, Swaminathan highlighted the role of governance in guiding SFBs towards sustainable growth with stability. He also emphasised the importance of sustainable business models.Additionally, he highlighted the need for strengthening cybersecurity to protect the entities against digital threats and urged for a stronger focus on financial inclusion, customer service, and grievance redressal to ensure a broader reach of banking services.Executive Directors S C Murmu, Rohit Jain, and R L K Rao, along with other senior officials representing the Supervision, Regulation, and Enforcement Departments of the RBI, also participated in the conference.   -  Business Standard  30 th  September, 2024
Post a Comment
Read more

Brigade Hotel Ventures files draft papers with Sebi for Rs 900 crore IPO

By
  Brigade Hotel Ventures Ltd, owner and developer of hotels in South India, has filed draft papers with capital markets regulator Sebi to raise Rs 900 crore through an initial public offering (IPO).The proposed IPO is entirely a fresh issue of equity shares with no Offer-for-Sale (OFS) component, according to the draft red herring prospectus (DRHP).Proceeds from the issue to the tune of Rs 481 crore will go towards payment of debt, Rs 412 crore will be allocated to the company and Rs 69 crore to its material subsidiary, SRP Prosperita Hotel Ventures Ltd.Additionally, Rs 107.52 crore will be used to purchase an undivided share of land from the Promoter, BEL, and the remaining funds will support acquisitions, other strategic initiatives, and general corporate purposes.The company may raise up to Rs 180 crore through a Pre-IPO Placement.   If the placement is undertaken, the issue size will be reduced.Brigade Hotel Ventures Ltd is a wholly-owned subsidiary of Brigade Enterprises ...
Post a Comment
Read more