Protests on Pegasus, farm laws continue
Lok Sabha passes Bill to end all retrospective taxation
The Lok Sabha and Rajya Sabha were adjourned for the day on Friday shortly after being adjourned till noon amid Opposition protests over various issues. The Lok Sabha passed the Retrospective Tax Amendment bill shortly before getting adjourned for the day.
Amid protests and heavy sloganeering, Lok Sabha passed the Taxation Laws (Amendment) Bill, 2021, that nullifies Retrospective Tax law in which Vodafone and Cairn Energy took the Union government to court.
The Bill proposes amendments to the Income Tax and Finance Act, 2012, to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets. Once cleared by Rajya Sabha, all tax demands made on companies like Cairn Energy and Vodafone using the 2012 legislation on indirect transfer of Indian assets prior to May 28, 2012, will be withdrawn.
The Bill was introduced by finance minister Nirmala Sitharaman in the Lok Sabha on Thursday.
The House also cleared the Central Universities (Amendment) Bill, 2021, to set up a Central university in Ladakh.
Lok Sabha was adjourned for the day shortly after the passage of two bills amid protests by Opposition members over Pegasus and other issues, while Rajya Sabha remained non functional due to Opposition protests. Both Houses will now resume on Monday.
“Keeping up the commitment of BJP that we do not believe in retrospective application of tax, we are fulfilling that word by bringing this amendment,” Ms Sitharaman said.
She added that the BJP was against the retrospective tax even while being in Opposition and the government could not bring a change in the existing law since Vodafone and Cairn Energy took the matter to the court.
The Finance Act 2012, which amended various provisions of the Income Tax Act, 1961, with retrospective effect, contained provisions intended to tax any gain on transfer of shares in a non-Indian company, which derives substantial value from underlying Indian assets, such as Vodafone’s transaction with Hutchison in 2007 or the internal reorganisation of the India business that Cairn Energy did in 2006-07 before listing it on local bourses.
Besides creating uncertainty in the minds of investors, retrospective taxes have in recent months been overturned by international arbitration tribunals in two high profile cases - UK telecom giant Vodafone Group and oil producer Cairn Energy.
Opposition members continued with sloganeering against the government and demanded a discussion on Pegasus and the farmer’s issues. Later, leaders from 14 Opposition parties reached Jantar Mantar to lend support to the protesting farmers.
Amid farmers’ protest against three contentious farm laws, agriculture minister Narendra Singh Tomar informed Parliament that the government remains open for discussion to resolve the issue.
“Government is always open to discussion with farmers unions and will remain open to discussion with agitating farmers to resolve the issue,” Mr Tomar said in a written reply to the Rajya Sabha.
Asserting that the government engaged itself actively and constantly with the agitating farmer unions to end the protests, the minister said that 11 rounds of negotiating talks were held between the government and agitating farmers to resolve the issues.
“However, farmer unions never agreed to discuss the farm laws except for demanding their repeal,” he said.