Source: Economic Times
India has sought to reassure foreign investors of a business-friendly climate and “a stable tax regime” with Prime Minister Narendra Modi’s ambitious “Make in India” strategy, in the backdrop of the Nokia and Vodafone taxation cases continuing to cause widespread disquiet in the Nordic countries and elsewhere.
“All political parties in India have accepted the basic principle that liberalization of the economy, decontrol, deregulation and exposure to foreign investment is needed,” said President Pranab Mukherjee, during his ongoing six-day visit to Norway and Finland.
“We are providing a stable tax regime. Yes, there are some disputes…You can hardly find a country in the world with a democratic system where sometimes disputes in regard to taxation matters do not arise. But ultimately, the final decision is through arbitration by the independent judiciary and everyone accepts that,” he added.
Mukherjee referred to the Bombay high court judgment on October 10, which ruled in favour of British telecom major Vodafone in one of its cases connected to “transfer pricing” with Indian tax authorities, amounting to Rs 3,200 crore.
Holding that while the Indian government was “free” to contest the ruling in the Supreme Court, which would then be the final arbitrator, Mukherjee said, “I think if this (high court) judgment prevails then definitely around 26 companies, multinationals and big Indian companies, are going to be benefitted, including Nokia.”
In Oslo, after India and Norway inked 13 agreements in fields ranging from education to defence, Norwegian PM Erna Solberg said her country saw “great potential” in doing business with India provided the right framework and good agreements on tax systems were in place. Norway, which has a testy relationship with China, sees India as ”an important actor” in the “rise” of Asia and will soon set up a consulate in Mumbai as well, she said.