The controversial retrospective tax provision has come back to worry the Indian government. After a fresh notice to Vodafone in a $2-billion tax dispute was served amidst the Make in India week event in Mumbai, the government has come in a spot over the issue of this tax, which can be seen as a deterrent to investment.
Globally, there are various models put under use which offer to resolve the prickly tax issues, and the government is considering these models to check if something can be used to address high-profile cases, which have come under the banner of 'tax terrorism'.
The possible resolutons include creating provisions to allow for specific directions from experienced
The government is looking forward to tackling the issue as soon as possible so that it doesn’t succeed in attracting lesser investments required to speed up economic growth from the 7.6%, which could very well be possible if the issue is not handled soon.
After receiving the notice, Vodafone was very opinionated about expressing its annoyance, which is possible because the company has repeatedly pledged further investments in India, which happens to be one of its most crucial markets.
"In a week when PM Modi is promoting a tax-friendly environment for foreign investors, this seems a complete disconnect between government and the tax department," Vodafone had said in a February 16 statement issued after it received the tax notice.
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