Home >Politics >Policy >Warned UPA of retrospective tax law change against Vodafone: Montek Singh Ahluwalia
A file photo of former Planning Commission deputy chairperson Montek Singh Ahluwalia Photo: Mint (Mint)
A file photo of former Planning Commission deputy chairperson Montek Singh Ahluwalia Photo: Mint (Mint)

Warned UPA of retrospective tax law change against Vodafone: Montek Singh Ahluwalia

  • I-T Act was amended in 2012 with retrospective effect making offshore deals taxable in India
  • Vodafone's acquisition of Hutch Essar in 2007 ducked the Indian taxation laws

NEW DELHI : Former Planning Commission deputy chairperson Montek Singh Ahluwalia on Thursday said he had advised former Prime Minister Manmohan Singh and finance minister Pranab Mukherjee against the controversial retrospective amendment to the Income Tax Act in 2012 meant to bypass a Supreme Court verdict and nail British telecom giant Vodafone in a tax case.

“Unfortunately, they did not heed his advice," Ahluwalia told The Wire in an exclusive interview, ahead of the launch of his forthcoming book “Backstage: The Story Behind India’s High Growth Years".

Ahluwalia also said at no point thereafter has Manmohan Singh told him that the decision to retrospectively amend the Income Tax Act was a mistake.

The government had amended Income Tax Act in 2012 with retrospective effect making offshore deals taxable in India after the Supreme Court ruled in January that year that Vodafone’s transaction was not taxable here. India's tax dispute with Vodafone Plc revolves around its purchase of Hutch Essar in 2007 for $11 billion.

Ahluwalia’s comments are significant as he played a key role in the then Congress-led United Progressive Alliance (UPA) government, particularly with respect to framing of policy stand. Manmohan Singh- led UPA government, after being in power for a decade, was voted out in 2014.

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