Caller Calls Tune
- Government unlikely to ask for review of SC judgement as it would be seen as anti-FDI
- New Direct Tax Code expected to fix tax liability on capital gains in India
- Treaties with tax havens like Mauritius being reworked to stop misuse by shell firms
- Stricter scrutiny of similar M&A cases expected; no more blanket exemptions
It hasn’t escaped anyone’s attention that the Vodafone tax case verdict was quite exquisitely timed. Come to think of it, the value the Indian government derived from it was worth more, much more than the $2.5 billion immediately at stake. Faced with a sagging economy and faltering global image as an investment destination—and fresh from a reversal on opening up investments into multi-brand retail—upa-ii needed to send out a strong signal that India (genuinely) welcomed foreign direct investment (FDI).
The SC verdict on January 20—which...