The SC has gone a step further to state that even if one were to not apply the codified GAAR provisions, the judicial GAAR would continue to apply, point out Pranav Sayta and Bhargav Selarka.
An analysis of S&P BSE 500 companies suggests that promoters of Indian private-sector companies in particular could end up paying at least 20 per cent more as additional tax on the same dividend income.
The bill to nullify retrospective taxation offers a fair solution within the framework of Indian law and Parliamentary sovereignty to companies which have been subjected to such demands, Finance Secretary T V Somanathan said on Thursday. Finance Minister Nirmala Sitharaman introduced 'The Taxation Laws (Amendment) Bill, 2021' in the Lok Sabha that seeks to withdraw tax demands made using a 2012 retrospective legislation to tax the indirect transfer of Indian assets. The Bill provides for the withdrawal of tax demand made on "indirect transfer of Indian assets if the transaction was undertaken before May 28, 2012 (i.e. the day the retrospective tax legislation came into being)."
Dividend distribution tax in FY20 would only be applicable after deducting Rs 70 received from the foreign subsidiary, meaning 20.56 per cent DDT would be paid only on Rs 30.
The amendment would help check round-tripping of funds and boost the domestic consumption, Jaitley added
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