India can’t be allowed to become a tax haven
In a strong message to multinationals campaign against taxing Vodafone, Government ruled out any rethinking on the issue making it clear that India cannot be a tax haven just to attract foreign investment.
It also asserted that Parliament has the right to make amendments to law to correct Supreme Court judgement and would not allow a situation where a corporate would avoid paying tax here by operating from a tax haven.
“I would like to be guided either by Double Taxation Avoidance Agreement (DTAA) or tax. There cannot be a situation that somebody will make money on an asset located in India and will not pay tax either in India or to the country of its origin.
In an hour-long speech in reply to the debate in the Lok Sabha on the Finance Bill, he said taxing Vodafone is about combating black money menace and referred to the Supreme Court judgement which had held that the British telecom major was not liable to pay tax on its acquisition of Hutchison stake in Hutchison Essar in 2007. The Bill was later passed.