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At a time when Prime Minister Narendra Modi is trying to attract investments with the promise of a predictable and investor-friendly business environment, the revenue department seems to have different ideas.
As reported in this newspaper and elsewhere on Wednesday, the tax department has threatened to seize Vodafone’s assets if the company fails to pay a disputed amount of Rs.14,200 crore in taxes. The issue is under international arbitration.
Clearly, the kind of headlines this tax notice managed to make in both Indian and international media is unlikely to inspire confidence among potential investors. Further, calling the notice a routine exercise by the tax department has not helped matters.
Technicalities aside, if the government really intends to bring a positive change in the business environment and attract investments, it will have to be careful in taking forward the legacy of routine bureaucratic procedures.