London: Finance Minister Arun Jaitley today rejected suggestions that the huge retrospective tax demand on Cairn India has overshadowed enthusiasm in the Indian economy and said it is a “legacy” issue that has to be sorted through legal process.
“There's a huge amount of enthusiasm about India. People are looking for areas to invest in India. India is back on the radar of investors, we had fallen off from there earlier,”
Jaitley told reporters as he wrapped up his visit here.
The Finance Minister said that, “at the same time, the investors also closely scrutinise every step (taken by the government) on two grounds—whether you are able to incrementally move in the direction you have promised or are you taking any movements in the contrarian direction. And, I think we are moving in one consistent direction.”
“The second fact is whether obstructionism is able to halt you or are you able to overcome it. So far, we've surely been able to overcome it,” he said.
Asked if the recent headlines surrounding the tax demand issued to UK-based oil major Cairn Energy overshadowed this general sense of enthusiasm, he dismissed it as “legacy issues” of the previous government.
“When the new government had come in, I had stated the policy of the new government that it would not move in the direction of any retrospective legislation on tax issues.
“Two, any fresh notices or new action will ordinarily not be done and if any assessing officer wants to take any such action, he'll require the clearance of the Central Board of Direct Taxes (CBDT),” Jaitley said.
“As far as earlier notices and legacy issues are concerned, they'll have to be sorted out through a due judicial process. We've stuck to that word. And, wherever in the earlier issue the judicial process has decided some issue, as recently in some cases they have, we've accepted that,” he said.
For instance, Jaitley said, on Vodafone and Shell issues whatever the courts decided, the government accepted that.
Stressing that it remains the declared position of the Government of India, Jaitley said, “Any assessee, if he has any grievance against what I call the legacy issues of the previous government, they have the due process to resort to.”
During his two-day visit, Jaitley held a series of conferences with investors, including one organised by the UK India Business Council (UKIBC), one at the London Stock Exchange and a conference of institutional investors organised by JP Morgan.