The Lok Sabha on Friday passed two Bills including The Taxation Laws (Amendment) Bill, 2021, which scrapped the controversial retrospective taxation, amid the protests of Opposition on Pegasus and Farm Bills. The House also passed the Central Universities Amendment Bill to start a new university in Ladakh without any debate and got adjourned for the day around 12:30 noon.
Union Finance Minister Nirmala Sitharaman described the 2012 legislation as “bad in law and bad for the investors' sentiments”. Rajendra Agrawal, who was in the chair, declared the bill passed after clause-wise discussions of the bill and a brief statement by Sitharaman. The finance minister said there were 17 litigations due to the retrospective tax law and even the Supreme Court had said in 2012 that the tax could not be levied for the indirect transfer of shares of foreign companies. “The bill has been brought as a clarification,” she said.
Sitharaman said in 2014, the then Finance Minister Arun Jaitley had made a commitment to set up a high powered committee to look into the provisions of the 2012 law as the NDA government did not believe in retrospective taxes. Jaitley had said that the present government did not believe in retrospective taxes but the law could not be amended at that time as there were court cases, she said.
The finance minister said once the lawsuits were settled in September and December 2020, the government had started consultations with various stakeholders, including the Law Ministry. “Now we have come up with this bill at the next available opportunity. We are fulfilling the words given in this august house by former finance minister Jaitley and the government under the leadership of Prime Minister Narendra Modi brought the bill,” she said.
Congress leader Adhir Ranjan Chowdhury raised the Supreme Court's reference to the Pegasus matter as a "serious" issue amid a din in the Lok Sabha when it was set to pass a bill to end all retrospective taxation imposed on indirect transfer of Indian assets. He claimed the bill has been brought following "directions" from the Supreme Court and also ruling at international arbitrations, which has gone against the Indian government.
"The same Supreme Court yesterday said that Pegasus is also a serious issue," he said amid ruckus in the House, prompting the Chair to switch off his microphone. He could not be heard due to loud protests in the House.