Seizure of Government Property Abroad: Global Reputation

- India embroiled in a tax dispute amid claims of a 5 trillion economy

The present Modi government has set a target of delivering Rs 5 trillion to the country's economy in five years. On the other hand, the government is also claiming to be a global power. The government is also dreaming of creating an environment similar to that of western countries by creating about 100 smart cities in the country. Amidst all these claims and targets, the recent tax dispute between foreign companies and the government has plunged India into a global quagmire. In a tax dispute, a French court has seized 40 properties owned by the Indian government in Paris. As a result, India's reputation has been tarnished globally.

British company Crane has won a વાદ 1.6 billion tax dispute with the Indian government. Of this, કરોડ 500 million in interest is different. The company went to court as the Indian government did not pay the money. And the case against the Indian government has been won in a French court. In addition to the British company, Vodafone and Dewas Multimedia have also won billions of dollars in tax disputes against India.

Vodafone and Crein's controversy is about re-taxing large amounts of tax by amending tax laws from a later date. The NDA, which is currently in power, was in opposition when the UPA government made retroactive changes to the income tax law in the past. And the UPA government at the time opposed the move. Opposing the NDA's move at the time, he said such an arbitrary law would tarnish the country's image, discredit foreign investors, increase uncertainty on the trade-industry front and hinder foreign investment.

He said that after the NDA came to power in 2014, instead of repealing the law, it would be used sparingly. But in the end, it is because of this law that India's reputation at the global level has soared.

Vodafone as well as Crain offered a compromise with the government in the ensuing tax dispute. However, the Modi government turned down the offer and continued the exercise to collect crores of rupees in taxes. In the end, the government of India lost the case in the international arbitration in the court. However, after this final decision, India has decided to go for an appeal. However no new argument appears in this case. So even on appeal, India does not seem to benefit. Said tax experts.

The government argues that it is our sovereign right to tax anyone in the country. However the arbitration courts do not accept this argument. If the tax laws are changed in the past, it becomes difficult to trade with uncertainty.

Thus, on this issue the government now has no choice but to resort to compromise with foreign companies in tax disputes. If certain steps are not taken on this issue, more such adversities may arise in the near future. It is not unreasonable to say that this will only add to India's disrepute globally.