Union Finance and Corporate Affairs Minister Nirmala Sitharaman introduced the Taxation Laws (Amendment) Bill 2021 in the Lok Sabha on August 5, 2021.
- The objective behind this bill is to nullify the relevant retrospective tax clauses that were introduced in 2012 to bring past indirect transfer of Indian assets under the ambit of taxation.
- As per the proposed changes, any tax demand made on transactions that took place before May 2012 shall be dropped, and any taxes already collected shall be repaid, albeit without interest.
- To be eligible, the concerned taxpayers would have to drop all pending cases against the government and promise not to make any demands for damages or costs.
- Former Finance Minister, the late Pranab Mukherjee, had introduced the retrospective taxation power after the Supreme Court held that Vodafone could not be taxed for a 2007 transaction involving its purchase of a 67% stake in Hutchison Whampoa for $11 billion.
