The Rajya Sabha on Monday returned to the Lok Sabha the Taxation Laws (Change) Bill 2021 which aims to invalidate the effect of the amendment made by Finance Act 2012 to impose tax responsibility on gains resulting from indirect transfers of Indian assets with retrospective effect. The Rajya Sabha has limited jurisdiction over the Taxation Laws (Amendment) Bill 2021 because it has been certified as a money bill by the Lok Sabha Speaker. The Rajya Sabha can only return a money bill to the Lok Sabha with or without recommendations, according to Article 109 of the Constitution. The Lok Sabha must then pass the law, whether or not the Rajya Sabha's proposals are accepted.
The Rajya Sabha yesterday passed a motion introduced by Union Finance Minister Nirmala Sitharaman to return the Taxation Laws (Amendment) Bill 2021, which aims to end all tax demands made on companies such as Cairn Energy and Vodafone based on a provision in the Finance Act 2012 on indirect transfers of Indian assets prior to May 28, 2012. The Bill did not receive any recommendations from the Upper House. The Bill also proposes to provide that any demand for indirect transfer of Indian assets made before May 28, 2012 will be nullified if certain conditions are met, such as withdrawal or furnishing of an undertaking for withdrawal of pending litigation and furnishing of an undertaking to the effect that no claim for indirect transfer of Indian assets will be filed.
"The country is at a crossroads where rapid economic recovery following the COVID-19 outbreak is critical, and foreign investment plays a critical role in supporting speedier economic growth and employment," the government said. If passed, the bill is expected to help a number of businesses, including Vodafone and Cairn Energy, who had to pay tax under the old system.
Tags : #RAJYA SABHA #PARLIAMENT MONSOON SESSION 2021 #TAXATION LAW AMENDMENT BILL 2021
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