Pranab Mukherjee's stewardship of the economy will stand out as much for the manner in which he managed controversies as for creating quite a few of them, says A K Bhattacharya.
The retrospective tax controversy was highlighted by Vodafone, but Cairn Plc's continuing problems point to the impact this law has had on FDI in India's oil and gas sector.
The Department of Telecom, Department of Industrial Policy and Promotion, Ministry of Home Affairs, Ministry of External Affairs and the Department of Economic Affairs had to give their comments on the proposal, sources said.
The coming Union Budget might give relief to foreign portfolio investors from taxation on indirect transfers.
The IPO is expected to bring handsome fees for the selected banks at a time when billion-dollar listings have become scarce
The Finance Ministry has already circulated a draft Cabinet note withdrawing the conciliation offer to Vodafone to resolve the Rs 20,000-crore (Rs 200-billion) tax dispute case.
The Foreign Investment Promotion Board (FIPB) on Monday deferred a decision on Vodafone's Rs 10,141 crore (Rs 101.41 billion) proposal to buy out minority shareholders in its Indian arm as the Ministry of Home Affairs is yet to give its comments.
A bench headed by Justice H L Dattu, however, allowed the petitioner, former Additional Solicitor General Bishwajit Bhattacharyya, to file fresh petition with all the relevant documents stating what action Centre has so far been taken on the issue.
Vodafone, according to sources, in its response to the Finance Ministry's offer for conciliation, had expressed keenness to settle the long-pending capital gains tax dispute.
Granted 6-month relief, subject to interim payments and guarantee, on Rs 3,700-cr demand for alleged transfer pricing in FY09.
The onus of the tax dues of Rs 22,100 crore on Vodafone India's British parent could also fall on the merged entity.
Only 300 assessees came forward with disputed tax liabilities amounting to Rs 10,000 crore
World's second largest mobile operator Vodafone Plc of UK on Tuesday sought FIPB approval to invest Rs 10,141 crore (Rs 101.41 billion) in raising its stake in the Indian arm to 100 per cent.
Essar Global Fund, the Ruia company that invested $1.3 billion in telecommunications, towers and business process outsourcing over the years, made $6.5 billion, a five-fold return, when it flipped these businesses, according to discussions the group has had with merchant bankers.
Representatives of the British telecom company on Friday met senior finance ministry officials, in search of an amicable solution.
The letter was written on February 20, two weeks after the Cabinet Committee of Economic Affairs had approved the 100 per cent ownership proposal of Vodafone Plc in Vodafone India, at a proposed investment of Rs 10,141 crore (Rs 101.41 billion).
The Bombay High Court on Thursday stayed a new income tax demand of Rs 3,000 crore (Rs 30 billion) on Vodafone India Services in an alleged transfer-pricing case from 2010-11.
Besides Vodafone, several other major MNCs like Nokia and Shell were locked in tax dispute with the revenue department.
Vodafone Plc and its ex-shareholders have suffered due to the delay in an Initial Public Offer (IPO) of its Indian unit.
The government plans to take India into the top 50 ranks in ease of doing business in the next two years with efforts such as shifting all applications for industrial licenses online.
While it was technically not possible to block the deal, the tax department could resort to arm-twisting.
Country accounts for 38% of telco's global user base, 10% of total revenue
Vodafone's long-pending tax dispute with the government might be heading for a resolution, with the finance ministry considering changing the Income-Tax Act's retrospective amendment and taxing indirect transfer of assets prospectively from 2012, the year the law was clarified.
In 2013-14, India became the third-largest contributor to Vodafone Group's service revenue and operating free cash flow.
The government now ends its mandate with reaffirmation in the vote-on-account of the same goals, for which it claims to have a clear line of sight.
The retrospective tax decision reversing the January 2012 Supreme Court verdict in the Vodafone case has often been cited as the reason for foreign investors losing confidence in India as an investment destination.
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