Lok Sabha on Friday passed the Taxation Laws (Amendment) Bill, 2021, which will likely help settle disputes with Cairn Energy Plc, Vodafone Group Plc, and 15 other companies over retrospective tax demands raised by the Union government.
The Bill was cleared by the Lok Sabha, amid uproar by opposition parties, after finance minister Nirmala Sitharaman made a brief statement about the need for the amendment.
Sitharaman said the idea was to fulfill commitments given by the Bharatiya Janata Party (BJP), Prime Minister Narendra Modi, and the former finance minister late Arun Jaitley. The minister also explained that during the period when these cases were sub-judice at various platforms, the government could not make legislative changes and had to wait for their logical conclusion in courts.
"We are amending the law to fulfill that commitment," Sitharaman added.
The new bill seeks to nullify tax demands raised in 17 disputes, subject to riders. Conditions for dropping the tax claims include withdrawal of pending litigation and dropping of claim for cost, damages, interest, etc., by the disputing party. For amicable settlement of disputes, the government will also refund amount paid in these cases without any interest.