Retrospective tax: 'Government decision on Vodafone case will lift investor sentiment'

The government deciding not to appeal against a high court order in Vodafone case will help in correcting perception about tax department and lift the sentiment of global investors, industry said.

"We believe that it is a very appropriate decision and this will go a long way in correcting the perception of the tax administration being adversarial. It will help in creating a conducive tax environment, specially for the overseas investment community," Ficci Secretary General Didar Singh said.

Also Read: Vodafone off the hook in Rs 3,200 crore transfer pricing case

"This decision will also help in uplifting the positive sentiments of the domestic industry further," he added.

The decision on Vodafone clearly demonstrates courage on the part of government to resolve issues upfront, Assocham Secretary General D S Rawat said.

"It will lead to a big lift in sentiment among global investors," he said.

Also Read: Government will not challenge transfer pricing litigations involving MNCs

In a significant development, the government today decided not to appeal against a Bombay High Court ruling that Vodafone was not liable to pay tax demand of Rs 3,200 crore in a transfer pricing case.

The High Court in its October 10, 2014 order had given a big relief to the UK-based mobile service provider by ruling that it is not liable to pay an income tax demand of Rs 3,200 crore in a case relating to transfer pricing.