Seeking to assure global investors of a stable taxation regime, Law Minister Ravi Shankar Prasad on Tuesday said retrospective tax should be generally avoided as the country needs foreign investment to boost the economy.
“The larger view is that retrospectively is avoided to the maximum. The fiscal regime, the policy regime, taxation regime must be very evident because India needs investment,” he told reporters after taking charge of the ministry.
Amendment to Income-tax Act with retrospective effect by the UPA government caused uncertainty among global investors and India was even slapped with an arbitration notice in a Rs. 20,000 crore tax case by British telecom major Vodafone.
On the Vodafone notice, Prasad said: “We will look into it. Our manifesto has been very specific that we want a stable regime where those who invest in India may not have to face uncertainty.”
The goal of the government, he said, is that those who invest in India must have the assurance of a stable fiscal policy and also legal regime under which they are investing.
He further said that “any wrong doing or corruption or extraneous considerations shall be visited very seriously”.
The new minister assured investors that the NDA regime would be “fair, non-discriminatory, transparent and stable”.