New Delhi: The finance ministry today said it is looking into tax implications of all large cross-border mergers and acquisitions, against the backdrop of the Supreme Court decision in the Vodafone case, reports PTI.
"The Department of Revenue is looking at all large financial transactions. We are definitely looking at cross-border transactions," revenue secretary Sunil Mitra said on the sidelines of a Federation of Indian Chambers of Commerce and Industry (FICCI) event here.
"Cross-border transactions are a recent phenomenon. They have started since 2006, so there is need to look into these and study these," he added.
Responding to a query on whether the ministry is looking into more companies after the Vodafone tax issue, which embroiled the tax office and the international cellular operator in a major court battle, Mr Mitra said the department has been doing so even before Vodafone happened.
"Vodafone happened in middle of 2007. We have been looking into a number of cases, acquisitions that have happened through overseas transactions," Mr Mitra said.
The government last week asked Vodafone to pay Rs11,218 crore in taxes within a month for the acquisition of Hutchison's stake in the telecom joint venture in India in 2007.
The notice was issued following the Supreme Court directive on 27th September to the Income Tax (I-T) assessing officer to determine and quantify the tax liability of Vodafone within four weeks. Vodafone Essar, however, contested the tax notice.
The case relates to a deal in 2007 when Vodafone, through its group firm Vodafone International Holdings, bought Hutchison Telecommunications India's (HTIL) 67% stake in Hutchison Essar for over $11 billion.
"The tax demand has been raised in pursuance to the direction of the Supreme Court of India dated 27th September to the Income Tax Assessing officer to determine and quantify the tax liability of Vodafone within four weeks," an official has statement said.
Last month, the Supreme Court had refused to stay an earlier high court order, which ruled that Indian income tax authorities have jurisdiction to tax Vodafone on its deal with Hutch.
New Delhi: Concerned over delays in environment clearance to South Korean major Posco's Rs54,000 crore steel project in India, steel minister Virbhadra Singh today said that all “hurdles” should be removed from its way “expeditiously,” reports PTI.
He said the demand for speeding up the proposal is not because of prime minister Manmohan Singh's scheduled visit to South Korea next month, but is in view of new technology the project promises to bring into the country for steel making.
"... Our demand is that hurdles (in environment clearances to Posco) should be removed expeditiously. Whether or not PM goes to South Korea next month, the demand is not dependent on that. We want the technology to come in India as soon as possible," Mr Singh said on the sidelines of a Steel Summit here.
"PM is aware of the matter. The Posco project is pending with the environment ministry for long," he added.
The South Korean steel major had signed a pact with the Orissa government in 2005 for setting up a 12 million tonnes per annum (MTPA) steel plant at Jagatsinghpur in Orissa.
However, the project has failed to take off due to various regulatory hurdles.
The project promises to introduce a new technology for making steel — Finex, through which low grade iron ore and coking coal can be used for steelmaking at much lower cost.
The 72-million-tonne domestic steel industry mainly consumes lumps at present, as it lacks the expensive Finex technology required to refine the fines. About 50% of the iron ore produced in the country is exported and fines constitute 85% of exports.
India produced 230 million tonne of iron ore last fiscal, out of which 106 million tonne were shipped out.
Earlier this week, Mr Singh was peeved by the appointment of “activists” in the forest panel for clearing the project had advised environment minister Jairam Ramesh to be "pragmatic".
The approach has to be pragmatic and not dogmatic; he had said lamenting that known activists were being appointed in such committees.
He was referring to the four member panel comprising three activists — Uma Pingle, Devendra Pandey and V Suresh who have opposed Korean steel giant's project, billed as the largest FDI in India.
Mr Singh had stressed that the prime minister too was keen that the project takes off.
The prime minister is likely to reassure South Korean President Lee Myung-bak that India will address all issues related to Posco project.
Mr Lee is likely to take up Posco’s case with the prime minister during the East Asian Summit in Hanoi, Vietnam.
New Delhi: The finance ministry today said it is hopeful of getting the Direct Taxes Code (DTC) bill approved by Parliament in the next fiscal to enable its implementation from 1 April 2012, reports PTI.
"The draft DTC is with the Parliamentary Standing Committee. It is likely that by February-March, we should receive their comment and by the middle of next year in the monsoon session, it should be voted and made law," revenue secretary Sunil Mitra told reporters on the sidelines of a Federation of Indian Chambers of Commerce and Industry (FICCI) conference here.
In August, the government decided to delay the implementation of DTC by a year to 1 April 2012.
The DTC, which seeks to replace the Income Tax Act 1961 and simplify direct tax laws, was originally proposed to be implemented from 1 April 2011.
"In the event of the Standing Committee giving its report, our effort will be to do it (get the bill passed) at the earliest. Until it is passed, we cannot bring the subordinate legislation," Mr Mitra said.
"Sooner it (the bill is passed) happens, the more time we will have for the sub-ordinate legislation...," he added.
After criticism by various quarters, the government had dropped its earlier proposals on taxing long-term savings like provident funds and imposing minimum alternate tax (MAT) on gross assets of companies.
The government would lose about Rs53,000 crore in tax revenue on account of the increase in exemption limits and tweaking of slabs in the Direct Taxes Code bill.
The delayed implementation of the DTC, which is a replacement of Income Tax Act 1961, would give corporates and individuals enough time to get ready for the switchover.
As per the bill, income of Rs 2-Rs5 lakh would be taxed at 10%; Rs 5-Rs10 lakh at 20% and above Rs 10 lakh at 30%.