The European Union said on Thursday that it was still concerned about New Delhi’s proposed move to retrospectively tax Vodafone-Hutch deal-type overseas transactions involving underlying Indian assets.
The Ambassador of the EU to India, Dr Joao Cravinho, said the EU had taken up the matter with the Finance Minister, Mr Pranab Mukherjee, ahead of the Union Budget, but was yet to get a response.
Dr Cravinho added that the EU as well as all European companies directly and indirectly affected by this proposal were still in discussions with the Indian Government on the matter.
He said investors needed certainty on tax matters. The Ambassador said the matter was also being looked at from the viewpoint of the India-EU Free Trade Agreement, which would have a chapter on investment protection.
Pointing out that several EU member countries had separately entered into bilateral investment promotion and protection agreement with India, he said these had to be harmonised, especially in the context of the FTA and without damaging any individual member country’s interests.
However, he said he did not see the chapter on investment or the issues of labour and environment as FTA deal breakers.