Concerned over the impact of the government's decision to amend the Income Tax Act with retrospective affect, International Chamber of Commerce (ICC) and another industry body BIAC want to engage with the Finance Ministry to work out a solution to the issue.
New Delhi: Concerned over the impact of the government's decision to amend the Income Tax Act with retrospective affect, International Chamber of Commerce (ICC) and another industry body BIAC want to engage with the Finance Ministry to work out a solution to the issue.
"Dialogue is the best forum to solve differences of view. Let us work together to find a solution which raises necessary revenues while maintaining India’s good climate for investments," they have said in a letter to Finance Minister Pranab Mukherjee.
While ICC represents about 1,00,000 companies spread over 130 countries, BIAC represents OECD's business community.
They have raised the concerns about the impact of Mukherjee's Budget proposal to amend the IT Act with retrospective effect to bring into tax net Vodafone-type merger and acquisition deals involving domestic assets.
UK-based Vodafone, which in 2007 bought Hong Kong-based Hutchison's telecom business that included India assets for around USD 11 billion, has attracted tax of Rs 11,000 crore.
"Our organisations are ready to discuss with you and your staff how best to approach the balance between the financial needs of your country, as exemplified by the unexpected retroactivity of tax rules, and the optimal position of your country in attracting new investments not only by foreign investors (FDI) but also by investors resident in your country," the letter said.
They have also urged the minister to include a representative of ICC as member of the advisory group of international taxation and transfer pricing.
Recently, several global business associations have also sought reconsideration of the retrospective amendment of the Act. The issue was also raised by UK Chancellor of Exchequer George Osborne with Mukherjee.
However, the Finance Ministry has maintained that India is neither a zero tax country nor a tax haven.