With reference to the lively editorial "Bury retro tax ghost" (Business Standard, December 22), there can't be two views that India can't afford an unpredictable tax regime, more so when the matter relates to the international business entities. In this instant case, Cairn Energy, a British oil company's decision to take the retrospective tax issue to PM Narendra Modi reflects its desperation for a solution to a Rs 10, 247 crore tax dispute that has dragged on for close to two years (from January, 2014). This development could easily belie the 'hope' that was generated consequent upon PM Modi's statement in London last month that had specifically vouched for 'no retrospective taxation' in India.
If one goes by the detailed information revealed by this editorial, there appears to be no case for raking up of some fresh tax obligations on the part of Cairn Energy even after the government had reportedly approved the relevant transactions. One could also be reminded of an identical retrospective taxation case involving another British (telecom) company Vodafone which got initiated during UPA II regime and the then Finance Minister P Chidambaram had remained virtually unmoved for some unknown reasons. Mind you, this case was later buried by the government of the day as some better sense might have prevailed over it. But what is now preventing it from adopting the similar right path in this case too is anybody's guess.
S. Kumar, New Delhi
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