Retrospective tax: Five cos look to settle litigation, arbitration with govt

A slew of big companies, comprising Tata Group, Sanofi Aventis, WNS, Mitsui & Co, and Genpact, are looking to settle cases or arbitration proceedings against the Centre following its move to rescind a 2012 retrospective tax amendment. 

Around 17 corporates. involved in legal battles at several levels and about half a dozen, are willing to take up the government's offer to settle tax disputes, sources told the Economic Times. 

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The Centre has promised to repay taxes already collected and withdraw from arbitration or legal cases if the companies also step down and relinquish claims for interest, damages, or other costs.

The government, however, has not yet set clear rules for such settlements. Meanwhile, the companies have kicked off the process of meeting officials, the sources stated, adding that they have got in touch with legal and tax advisors to settle the issue at the earliest.

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Tax experts are of the view that the settlement mechanism may vary contingent on the specifics of each case. 

Thus, the companies are trying to get clarity on how the new law will work, if it would impact other prospective lawsuits and tax demands arising out of indirect transfer of shares, along with the timeframe for refunds the Centre has promised.