It has ruled that the tax levy, pertaining to a corporate reorganisation exercise undertaken in 2006-07, falls foul of the India-U.K. bilateral investment pact. The timing could not have been worse for the government — expiry of a three-month deadline to contest a similar retrospective taxation case lost against Vodafone this September. Finance Minister Nirmala Sitharaman has repeatedly asserted that India retains the sovereign right to levy taxes. The fact is that this government has asserted from the outset it is not in favour of retrospective legislative changes. Its aspirations to rope in global investments must be matched by ensuring policy stability and creating a robust regulatory framework.

Source: The Hindu December 24, 2020 18:35 UTC