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International business community attacks retrospective amendments to Indian tax law

New Delhi, Mon, 02 Apr 2012 ANI

New Delhi, Apr 2 (ANI): The international business community has reportedly written to Indian Prime Minister Manmohan Singh complaining about his governments' decision to introduce retrospective amendments to the tax law.

According to some of the world's most powerful trade bodies, the changes, which could crystallise a 1.4 billion pound tax charge for Vodafone, threaten an exodus of international investment from India.

A letter from organisations such as the CBI, the US National Foreign Trade Council and Japan Foreign Trade Council warned the changes have "called into question the very rule of law, due process, and fair treatment in India," The Telegraph reports.

"We are writing to express deep concerns about many of the tax provisions proposed in the Finance Bill 2012," the letter states.

"If enacted, these proposals will significantly alter the Indian taxation of our member companies with retroactive effect extending back for as much as half a century," it said.

"Some of our member companies had already begun re-evaluating their investments in India due to increasing levels of controversy and uncertainty regarding taxation," it added.

The Indian Finance Bill introduced a measure that means deals involving Indian companies dating back to the 1960s could be taxed, irrespective of where the deals were carried out.

Vodafone has been fighting to overturn a 1.4 billion pound tax claim arising from its 2007acquisition of Hutchinson Whampoa's Indian business.

According to the paper, the letter was signed by Business Roundtable, Canadian Manufacturers and Exporters, Capital Markets Tax Committee of Asia, Confederation of British Industry, Japan Foreign Trade Council, National Foreign Trade Council, United States Council for International Business. (ANI)

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