Soothing nerves of foreign investors, the Government on Monday offered one-time settlement of cases emanating from retrospective amendment of tax laws, by asking companies to pay the basic tax demand and get waiver for interest and penalty. To provide a stable and predictable taxation regime, Finance Minister Arun Jaitley in Budget 2016-17 came out with a ‘Direct Tax Dispute Resolution Scheme’ to resolve cases pending in any Court, Tribunal, Arbitration or mediation under the Bilateral Investment Protection Agreement (BIPA).
Experts said this is a big step towards tax reform and will act as a breather for companies like Vodafone and Cairn, which have been facing multi-billion dollar tax liability following retrospective tax amendments made in 2012. “In order to give an opportunity to the past cases, which are ongoing under the retrospective amendment, I propose ‘One Time’ scheme of dispute resolution for them in which subject to their agreeing to withdraw any pending case lying in any Court or tribunal.”