India ready to address concerns of US business community:Pranab
Washington: Allaying fears of US business community over proposed controversial amendment to the I-T Act to bring into tax net Vodafone-type deals, Finance Minister Pranab Mukherjee has said changes were only clarificatory in nature and India was ready to listen to concerns.
"There is some sense of despondency amongst a section of USA businessmen, particularly because of their apprehension– and I would say misapprehension — about certain legislative amendments which we have proposed…Our policies are transparent … Whenever there is any misapprehension, we are ready to listen to them and readjust it when it is necessary," Mukherjee said.
The issue pertains to the proposed amendment to the Income Tax Act with retrospective effect, which would bring Vodafone-type deals under tax net and the UK-based telecom firm would be liable to pay Rs 11,000 crore tax for its acquisition of Hutchison`s stake in Hutchison Essar Ltd in May 2007. Mukherjee said the amendments proposed are mainly clarificatory in nature and not a substantial change and the tax regime in India is stable.
"We are not having any fixed mind with respect to a particular issue, but what is to be done has to be done within the legal system and legal framework," he said while responding to the questions from the US industry at a function here. Several global bodies have written letters to Prime Minister Manmohan Singh and other ministers saying that the government`s proposal to amend the Income Tax Act to bring into tax net Vodafone-type overseas deals involving domestic assets would hurt foreign investment.
Mukherjee said there is no uncertainty in the I-T laws and that India would be transparent and open to discussions with those who have complaints about the law. "One question comes to the mind that when you are giving retrospective effect to the law from the date of enactment of the Income Tax Act, 1962, can the income tax cases be opened since 1962, the answer is no. "Because there are other provisions in the Income tax Act itself, according to which no case can be reopened which is more than six years old," he said.
Mukherjee was addressing concerns expressed in the US by business community and also Treasury Secretary Timothy Geithner, that the proposed amendment to the I-T Act to reopen the Vodafone case would hurt investments in India. "From all these stand points, India is a good investment destination, so therefore there should not be any apprehension," Mukherjee said.