India has assured the United Kingdom that it has no plans to invoke retrospective taxation.
This assurance was given when the visiting UK Foreign Secretary, Philip Hammond who called on Finance Minister, Arun Jaitley here on Thursday. Incidentally, Jaitley had stated this in Parliament late last year.
Speaking to the Indian media after talks with Jaitley, the visiting dignitary said the Indian Finance Minister told him that the tax demand raised on Cairns was the ``previous Governments process still running.” Hammond requested to make the point that India has no plans to bring back retrospective taxation at a meeting with investors in London on Friday.
"For India to attract investment there should be clear signal and a predictable business climate which is predictable, stable and attractive” the UK Foreign Secretary told the Indian media
On March 10 the Income Tax Department on Tuesday slapped ₹10,247 crore ($1.6 billion) tax demand on Cairn Energy Plc, which termed the action as “very disappointing” and said it would contest the order.
The tax demand relates to an alleged ₹ 24,500 crore worth capital gains it made in 2006 while transferring all its India assets to a new company, Cairn India, and got it listed on the stock exchanges.
In response to a question on whether the issue of ban of a documentary film on BBC was taken up in the meetings here, Hammond responded ``BBC is independent organisation. We have no control over what BBC says and does.”
Asked whether he would be making taking up the issue of sale of 126 fighter jets to India, the Foreign Secretary said ``I have not raised it and will not raise it. It will be wrong and improper to raise it at this time,” he said and put in the proviso that there may yet be a chance for Eurofighter and BAE to summit an offer. In January 2012, the over $10-billion (₹ 50,000 crore) deal to supply 126 fighter jets to the Indian Air Force was won by the French firm Dassault Aviation SA. The French company beat other contenders including Boeing, Lockheed Martin, Cassadian (formerly EADS), Eurofighter, Russian MiG 35 and SAAB to get the order.