PRANAB MUKHERJEE SPRINGS RETROSPECTIVE TAX BOMB IN BUDGET: "TAX TERRORISM" UNLEASHED
Finance Minister Overrules Supreme Court Judgment to Squeeze Vodafone; Foreign Investment Crashes
On 16 March 2012, Finance Minister Pranab Mukherjee introduced an unprecedented amendment in the Union Budget allowing the Indian government to levy retrospective taxes on cross-border deals dating back to 1962.
The legislative move was designed to undo Vodafoneβs victory in the Supreme Court over an βΉ11,000 Crore capital gains tax notice on its 2007 Hutchison acquisition.
The retroactive legislation earned India the global tag of "tax terrorism", spooked international investors, sent the Indian Rupee tumbling, and choked foreign capital inflows for years.
π Key Figures & Decision Makers
- βΈ Pranab Mukherjee (Finance Minister)
- βΈ Manmohan Singh (Prime Minister)
- β’ Finance Bill 2012 Amendments & Permanent Court of Arbitration Award (Ministry of Finance & PCA Hague, 2012)