The government is likely to issue rules regarding retrospective tax cases this week after evaluating feedback from companies on the draft norms, a senior official said. The Centre is hopeful of a quick settlement of cases as the companies have indicated a willingness to indemnify the government against any future claims.
The rules offer up to 45 days from the date of final notification for litigants to provide an undertaking for settlement, and up to 15 days after submission for tax officials to accept or reject it. All litigation, arbitration and enforcement proceedings will have to be withdrawn within 60 days of the undertaking being accepted.
On 13th August,2021, Taxation Laws (Amendment) Bill, 2021 had got the President’s assent, which withdrew the retrospective tax clause that was added in 2012.
As per the new rule, companies will have to indemnify the government against any future claim and drop existing litigation. Accordingly, the government will refund the amount collected as retrospective tax without interest. The companies will also have to give an undertaking that they will not seek costs, damages, or interest.
Knowledge Source:
Over Rs 2400 Crore Income Tax Refund Issued in First Week of September