Companies May Get 45 Days To Retract Retro Tax Claims
- ByAyushi Ray | August 30, 2021
Companies may get 45 days to retract retro tax claims from the government, relating to the overseas sale of Indian assets once the final settlement rules are notified. The aim is to conclude the process in three to five months, depending on the current status of the dispute. Companies involved in 17 disputes, including Cairn Energy Plc and Vodafone Group Plc, will have to file an undertaking to the designated tax official, agreeing to withdraw all claims, petitions, appeals, and arbitration award enforcement efforts, to settle the cases under the recently passed amendments to the Income Tax Act. Once the firms commit to stop pursuing the cases, the tax official will accept or reject them within 15 days. The draft rules were released for public consultation on Saturday. The consultation period ends on September 4.
In cases where no claim or proceeding is initiated by the disputing party and it undertakes not to do so in the future and waives all rights relating to the retrospective tax dispute, the official will decide within 30 days whether or not to allow settlement of the dispute. The process takes a bit more time in cases where companies have initiated proceedings such as appeals, arbitration or arbitral award enforcement measures. Once they give the undertaking to withdraw these, they have to do so within 60 days of the tax department acknowledging the undertaking and file a form. Based on this form, the tax official will, within 30 days, decide whether to give relief or not, that is, settle the case under the Taxation Laws (Amendment) Act passed in the monsoon session of Parliament.
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