Nirmala Sitharaman says rules on retro tax to be framed soon

NEW DELHI: Finance minister Nirmala Sitharaman on Monday said the rules that will lead to the scrapping of the retrospective tax demands made on companies such as Cairn Energy Plc and Vodafone Plc will be framed soon.

Parliament earlier this month passed a bill to scrap a tax rule that gave the tax department power to go 50 years back and slap capital gains levies wherever ownership had changed hands overseas but business assets were in India.

The 2012 legislation was used to levy a cumulative of Rs 1.10 lakh crore of tax on 17 entities, including UK telecom giant Vodafone.

The bill provides for the government to refund the retro tax to companies provided all legal challenges are withdrawn.

Now the rules for the same have to be framed, Sitharaman told reporters here. “Rules will have to be framed… rules will be famed soon.”