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Finance Ministry to clarify PMO on retro tax

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Jun 28, 2012 at 09:25pm IST

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New Delhi: The Finance Secretary on Thursday promised that it will try to resolve all tax issues in next few weeks; says it will shortly to publish clarification on retro tax.

Earlier, the Prime Minister's Office has sought clarification on Retrospective Tax Rule which required Vodafone to pay of Rs 20,000 crore in taxes and interest. Vodafone Chairperson Analjit Singh met Montek Singh Ahluwalia to seek clarity on the issue. Analjit said retro amendment issues will be addressed and said that Vodafone told it will not be disappointed in the long-term.

"PMO sought clarifications on taxation issues and Section 9 of Income Tax Act (related to tax on indirect transfer of assets) ... We asked them to give us 2-3 weeks time," said Finance Secretary RS Gujral who again met Prime Minister Manmohan Singh on Thursday.

Ruling out any plans to further defer implementation of the controversial General Anti-Avoidance Rules (GAAR), which had evoked sharp reactions from both domestic and foreign investors, Gujral said the Ministry would be issuing draft guidelines shortly to seek comments from stakeholders.

"We have finalised the GAAR draft rules after three meetings with the stakeholders. The draft will have examples for what would be deemed as permissible and impermissible arrangement," Gujral added.

Earlier in the day Cabinet Secretary Ajit Seth held a meeting of top bureaucrats of key economic ministries to take stock of the economic situation to firm up steps for arresting the slowdown in growth.

The flurry of activity in Finance Ministry follows directions from Singh, who assumed charge of the Finance portfolio earlier this week. Singh has called for reversing the climate of pessimism.

Meanwhile, Vodafone India Chairman Analjit Singh met Planning Commission Deputy Chairman Montek Singh Ahluwalia. Vodafone has been in the running battle with the government over tax dispute totaling Rs 20,000 crore for its $12 billion Hutchison deal of 2007.

With additional information from PTI

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