THE US Treasury Secretary, Mr Timothy Geithner,
under pressure from the industry and trade, yesterday raised the retrospective
amendment issue with the Indian Finance Minister, Mr Pranab Mukherjee.
Mr Mukherjee told him that as per the I-T Act, no tax cases can be opened beyond
6 years. He was also informed that tax cases which have already been assessed
and finalized up to April 1, 2012 cannot be reopened. Further the Indian
tax laws are very clear that the companies making capital gains from the
assets located in India will have to pay taxes either in the country of
their origin or in India. It is not a case of double taxation but ensuring
that companies that are liable to pay tax must pay some tax.
On
the issue of categorization of software sales as royalties, it was informed
that discussions have been held in the past between the tax authorities in
both the countries and they had agreed to disagree on such characterization.
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