WASHINGTON, April 20 Indian Finance Minister
Pranab Mukherjee on Friday dismissed as unfounded concerns by
U.S. business groups that revised Indian tax laws might make
foreign investors retroactively liable for taxes dating back
"There is some sense of despondency amongst a section of
U.S.A. businessmen, particularly because of their apprehension -
and I would say misapprehension - about certain legislative
amendments which we have proposed," he said in Washington.
India's federal budget last month outlined a proposal to
enable tax authorities to make retroactive claims on overseas
corporate deals and bring in new measures to reduce companies'
ability to avoid paying Indian taxes. Critics say the measures
make India less attractive to foreign investors.
U.S. Treasury Secretary Timothy Geithner on Thursday pressed
Mukherjee for reassurances India remains open to foreign
investment, a U.S. Treasury Department spokeswoman said.
Mukherjee addressed the issue at a think-tank talk on the
sidelines of the annual spring meetings of the World Bank and
International Monetary Fund.
"Would the income tax cases be reopened from 1962? The
answer is 'no,'" he said. "No case can be reopened which is more
than six years old.
"There is no uncertainty," he said, adding that India would
hold transparent, open discussions with those who have
complaints about the law.
The U.S. Chamber of Commerce, the U.S.-India Business
Council, the Financial Services Forum and nine other U.S.
business groups wrote Geithner on Tuesday, urging him to press
Mukherjee on the issue.
India's recent budget proposal would retroactively impose a
capital gains tax on merger and acquisition deals conducted
overseas where the underlying asset is located in India.
It would amend 50-year-old tax laws to allow New Delhi to
pursue taxes on long-concluded transactions.
(Reporting By Paul Eckert; Editing by Leslie Adler)