The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Aayush Sharma, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
As the honorable Prime Minister of India Narendra Modi explicitly convinced the foreign investors of his government’s commitment to a stable tax regime at Make In India Week in Mumbai, the Income Tax Department sent separate notices to the telecom and energy majors Vodafone and Cairn Energy respectively. The notices slapped retrospective tax dues on both.
The Indian tax environment is something that is becoming an increasing notorious affair. Not only is the predictability of taxes an issue, but also the image of India at large – which is getting portrayed as nothing short of having a cash-strapped government trying to raise tax revenues from all possible sources.
To add to the list is the pending Goods and Services Tax (GST) legislation, the benefits of which are highly accepted across party lines but equally poorly supported in the Parliament. Everyone does acknowledge the relevance of GST bill in the extant highly fragmented indirect tax structure, but political differences have delayed the benefits from reaching the Small and Medium Enterprises (SME), retailers, e-commerce companies, the public in general and the Income Tax Department itself.
The need of the hour is to publically acknowledge the burial of retrospective taxation ghost as well as expedite the implementation of GST.