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Retro Tax: Govt. Issues Draft Rules for Litigation Settlement

Cairn Energy, Vodafone and 15 companies looking to settle retrospective tax disputes will have to declare details upfront of every “interested party” to the dispute with India and furnish their declaration “irrevocably” withdrawing all litigation and claims as part of proceedings.

This would be in addition to their own undertaking to withdraw any pending litigation or proceeding before any forum and assurance that they won’t pursue any further claim in the future.

The government on Saturday issued draft rules for implementing the Taxation Laws (Amendment) Act 2021 passed earlier this month to settle retrospective tax cases. It has sought comments by September 4 on the proposed rules, after which they will be formally notified.

The declaration from all interested parties is aimed at ring-fencing the government and government entities from any future claims from stakeholders other than these companies such as direct or indirect shareholders or any other beneficial owner at any global fora. S-ET

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