{"id":74361,"date":"2020-12-26T12:55:39","date_gmt":"2020-12-26T07:25:39","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=74361"},"modified":"2021-03-04T15:23:51","modified_gmt":"2021-03-04T09:53:51","slug":"issue-of-retrospective-tax-cases-what-should-india-do-next","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/issue-of-retrospective-tax-cases-what-should-india-do-next\/","title":{"rendered":"Issue of Retrospective tax cases; what should India do next?"},"content":{"rendered":"<p><b><span data-contrast=\"none\">Context:<\/span><\/b><span data-contrast=\"none\">\u00a0After Vodafone, India has lost its 2<\/span><span data-contrast=\"none\">nd<\/span><span data-contrast=\"none\">\u00a0case to Cairn Plc at\u00a0Permanent Court of Arbitration over a retrospective tax demand. Now,\u00a0what are the options left with India and which one should it chose?<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span style=\"font-size: 14pt;\"><b>WHAT ARE THE CASES IN QUESTION?<\/b>\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"11\" aria-setsize=\"-1\" data-aria-posinset=\"21\" data-aria-level=\"1\"><span data-contrast=\"none\">Very recently,\u00a0Cairn Plc has won a case of retrospective tax against India\u00a0at\u00a0Permanent Court of Arbitration. Court has asked Indian government to pay\u00a0for damages to the tune of $1.4 billion.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"11\" aria-setsize=\"-1\" data-aria-posinset=\"22\" data-aria-level=\"1\"><span data-contrast=\"none\">Previously in this year only, Indian\u00a0Government lost\u00a0a\u00a0retrospective taxation case to Vodafone, where\u00a0government need to pay\u00a0around \u20b980 crore, if it doesn\u2019t make any further appeal.\u00a0\u00a0<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">Now India has been left with the option of either conceding defeat and making payment to the companies or making further appeals. But cost-benefit analysis of both the option is necessary.<\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span data-contrast=\"none\">Read More \u2013\u00a0<\/span><a href=\"https:\/\/forumias.com\/blog\/india-lost-retrospective-taxation-case-to-cairn\/\"><span data-contrast=\"none\">India lost Retrospective taxation case to Cairn<\/span><\/a><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<p><span style=\"font-size: 14pt;\"><b>WHY GOVERNMENT SHOULD NOT MAKE ANY FURTHER APPEALS?<\/b>\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0a7\" data-font=\"Wingdings\" data-listid=\"12\" aria-setsize=\"-1\" data-aria-posinset=\"23\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Firstly,<\/span><\/b><span data-contrast=\"none\">\u00a0there is a need for attracting\u00a0global\u00a0investments to the country and\u00a0any further appeal would put investors in a\u00a0doubt.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0a7\" data-font=\"Wingdings\" data-listid=\"12\" aria-setsize=\"-1\" data-aria-posinset=\"24\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Secondly,<\/span><\/b><span data-contrast=\"none\">\u00a0the stance of the present\u00a0government on the issue was different in the past.\u00a0They called out the UPA government\u00a0for\u00a0setting\u00a0free \u201ctax\u00a0terrorism\u201d and \u201cuncertainty\u201d in the country\u00a0by enacting retrospective taxation.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"12\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"2\"><span data-contrast=\"none\">The Centre has now filed an appeal in the Vodafone matter in Singapore because it cannot take a different stance on two similar cases. A similar appeal too can be expected on Cairn.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\uf0a7\" data-font=\"Wingdings\" data-listid=\"12\" aria-setsize=\"-1\" data-aria-posinset=\"25\" data-aria-level=\"1\"><b><span data-contrast=\"none\">Thirdly,<\/span><\/b><span data-contrast=\"none\">\u00a0it would further dampen India\u2019s reputation as\u00a0the\u00a0<\/span><span data-contrast=\"none\">court already noted that this was\u00a0a\u00a0breach of fair treatment under the UK-India bilateral investment treaty.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-size: 14pt;\"><b>WHY GOVERNMENT SHOULD MAKE FURTHER APPEALS?<\/b><\/span><span data-ccp-props=\"{&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0a7\" data-font=\"Wingdings\" data-listid=\"13\" aria-setsize=\"-1\" data-aria-posinset=\"26\" data-aria-level=\"1\"><span data-contrast=\"none\">Keeping in mind the cost on exchequer, the government should\u00a0make\u00a0further\u00a0appeals.\u00a0This verdict includes a sharp $1.4 billion payable as damages to Cairn.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"13\" aria-setsize=\"-1\" data-aria-posinset=\"8\" data-aria-level=\"2\"><span data-contrast=\"none\">In the Vodafone case, the government would need to divide out around \u20b980 crore if it were to accept defeat.<\/span><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\uf0a7\" data-font=\"Wingdings\" data-listid=\"13\" aria-setsize=\"-1\" data-aria-posinset=\"27\" data-aria-level=\"1\"><span data-contrast=\"none\">Finance Minister Nirmala Sitharaman has repeatedly stated that\u00a0<\/span><b><span data-contrast=\"none\">India retains the supreme right to put taxes.<\/span><\/b><span data-ccp-props=\"{&quot;134233279&quot;:true,&quot;201341983&quot;:0,&quot;335551550&quot;:1,&quot;335551620&quot;:1,&quot;335559737&quot;:0,&quot;335559739&quot;:200,&quot;335559740&quot;:276}\">\u00a0<\/span><\/li>\n<\/ul>\n<p><span data-contrast=\"none\">As a first step after this setback, government must analyse carefully all the available options with it, as India is already suffering from an economic slowdown and looking to strengthen its domestic manufacturing capability. Some of the available options might turn away the foreign investment and technology associated with it.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Context:\u00a0After Vodafone, India has lost its 2nd\u00a0case to Cairn Plc at\u00a0Permanent Court of Arbitration over a retrospective tax demand. Now,\u00a0what are the options left with India and which one should it chose?\u00a0 WHAT ARE THE CASES IN QUESTION?\u00a0 Very recently,\u00a0Cairn Plc has won a case of retrospective tax against India\u00a0at\u00a0Permanent Court of Arbitration. Court has&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/issue-of-retrospective-tax-cases-what-should-india-do-next\/\">Continue reading <span class=\"screen-reader-text\">Issue of Retrospective tax cases; what should India do next?<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":74362,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,1351,1310,9],"tags":[1308,1248,1574],"class_list":["post-74361","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-9-pm-daily-articles","category-daily-news","category-daily-news-updates","category-public","tag-eco_0","tag-eco_01","tag-india_uk_relations","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2020\/12\/Issue-of-Retrospective-tax-cases-what-should-India-do-next.jpg?fit=1280%2C720&ssl=1","views":{"total":0,"cached_at":"","cached_date":1704822296},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/74361","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=74361"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/74361\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/74362"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=74361"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=74361"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=74361"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}