Ease of doing business: reality check

confuzzled dude wrote:and this
https://such.forumotion.com/t31308-foreign-investors-cry-foul-over-indian-tax-surprise

But early this year the Finance Ministry struck back. To everyone’s surprise, they sought to bill foreign investors for years of retroactive taxes under India’s Minimum Alternative Tax, which previously hadn’t applied to them. The MAT took effect in 1996 to ensure that companies with operations in India pay at least 20% tax on profits. In 2012 one tax body issued a nonbinding ruling that foreign investors without operations in India should pay, too. Based on that dubious and largely unnoticed move, officials moved to collect some $6.5 billion in retroactive levies.

Instead of stopping this shakedown, Finance Minister and Modi confidant Arun Jaitley embraced it, saying on television that he could “change the face of Indian irrigation” with the expected revenue. Only when foreign investors started withdrawing from Indian markets did Mr. Jaitley change his tune—a little. The tax dispute is unfortunate, he conceded, but it’s a judicial matter that is beyond his control. “If I waive off” the levy, he said in April, “we will be like a tax haven.”

confuzzled dude wrote:

confuzzled dude wrote:and this
https://such.forumotion.com/t31308-foreign-investors-cry-foul-over-indian-tax-surprise

But early this year the Finance Ministry struck back. To everyone’s surprise, they sought to bill foreign investors for years of retroactive taxes under India’s Minimum Alternative Tax, which previously hadn’t applied to them. The MAT took effect in 1996 to ensure that companies with operations in India pay at least 20% tax on profits. In 2012 one tax body issued a nonbinding ruling that foreign investors without operations in India should pay, too. Based on that dubious and largely unnoticed move, officials moved to collect some $6.5 billion in retroactive levies.

Instead of stopping this shakedown, Finance Minister and Modi confidant Arun Jaitley embraced it, saying on television that he could “change the face of Indian irrigation” with the expected revenue. Only when foreign investors started withdrawing from Indian markets did Mr. Jaitley change his tune—a little. The tax dispute is unfortunate, he conceded, but it’s a judicial matter that is beyond his control. “If I waive off” the levy, he said in April, “we will be like a tax haven.”

http://www.wsj.com/articles/india-ends-a-retroactive-tax-raid-1441756517

one step forward and two steps back

Kris wrote:

confuzzled dude wrote:

confuzzled dude wrote:and this
https://such.forumotion.com/t31308-foreign-investors-cry-foul-over-indian-tax-surprise

But early this year the Finance Ministry struck back. To everyone’s surprise, they sought to bill foreign investors for years of retroactive taxes under India’s Minimum Alternative Tax, which previously hadn’t applied to them. The MAT took effect in 1996 to ensure that companies with operations in India pay at least 20% tax on profits. In 2012 one tax body issued a nonbinding ruling that foreign investors without operations in India should pay, too. Based on that dubious and largely unnoticed move, officials moved to collect some $6.5 billion in retroactive levies.

Instead of stopping this shakedown, Finance Minister and Modi confidant Arun Jaitley embraced it, saying on television that he could “change the face of Indian irrigation” with the expected revenue. Only when foreign investors started withdrawing from Indian markets did Mr. Jaitley change his tune—a little. The tax dispute is unfortunate, he conceded, but it’s a judicial matter that is beyond his control. “If I waive off” the levy, he said in April, “we will be like a tax haven.”

http://www.wsj.com/articles/india-ends-a-retroactive-tax-raid-1441756517

one step forward and two steps back

>>>This is not just two steps back. This is outright dumb if you are out trying to drum up business. It is killing the goose before it lays its first golden egg. Sounds like the central-planning mentality where everyone is expected to dance to your tune is alive and well, except in this case those are the folks whom you are looking at to be your saviors.

LONDON: British oil firm Cairn Energy on Tuesday said it will seek from India over $600 million in damages for loss it suffered in value of its holding from a Rs 10,247-crore tax demand raised on its eight-year-old internal business recognition.

The Income Tax Department using a retrospective legislation had in January 2014 issued a draft tax assessment order on Cairn Energy over its 2006 internal business reorganisation and barred it from selling its 9.8 per cent stake in Cairn India.

Merlot Daruwala wrote:The Tax guys are running amuck. They send a notice making a huge retrospective claim on Cairn and blame it on UPA. In the last budget, the FM agreed that demanding MAT from FIIs is not right and exempts them, but the tax dept continues to legally pursue claims on earlier years. Harassment of companies with overseas operations over transfer pricing goes on unabated.

The most boneheaded proposal was this: ""The new measures are part of the government's effort to tackle black money in an non-obstrusive manner. The details will add to the taxman's knowledge about a particular assessee," a senior I-T officer said.

Somebody more sensible must have told the FM that he cant go gallivanting round the world spouting fantastic yarns about ease of doing business while his minions go around doing the exact opposite.

So exactly one day a humiliating climb down:
http://timesofindia.indiatimes.com/business/india-business/Facing-criticism-govt-puts-new-I-T-returns-form-on-hold/articleshow/46973163.cms

Modi fanboys, I finished saying my piece. You can now uncover your ears and stop going la-la-la-la...