joel.francis.7351
Par 100 posts (V.I.P)
What is Retrospective Tax - Meaning, Defination and Implications in India?
PM Modi today made a statement that he will implement retrospective tax. As soon as I heard about it, I started googling for it.
After reading all over, I found out that :
Retrospective tax is basically a controversial situation wherein you are asked to pay at the new (more likely) or the old (less likely) tax rates : purpose being getting the maximum tax possible .
In simple words, govt wants the most tax from you and if you found a loop hole and got away with it in the past, govt will open files again and claim tax from you.
Clarification amendments in law can be made with retrospective effect, which may have this effect.
An example: Service tax was levied on 'commercial training or coaching' in 2003. This covered courses run by 'commercial training or coaching institutes' except courses leading to a recognised degree or certificate. Many decisions and orders of the Tribunal set aside demands of service tax on non-recognised courses offered by registered charitable societies, on the ground that there was no profit motive and that therefore these were not 'commercial'. The law was amended retrospectively in 2010 to say that any course run for a fee is considered commercial. This brought all the disputed cases under the purview of the tax.
PM Modi today made a statement that he will implement retrospective tax. As soon as I heard about it, I started googling for it.
After reading all over, I found out that :
Retrospective tax is basically a controversial situation wherein you are asked to pay at the new (more likely) or the old (less likely) tax rates : purpose being getting the maximum tax possible .
In simple words, govt wants the most tax from you and if you found a loop hole and got away with it in the past, govt will open files again and claim tax from you.
Clarification amendments in law can be made with retrospective effect, which may have this effect.
An example: Service tax was levied on 'commercial training or coaching' in 2003. This covered courses run by 'commercial training or coaching institutes' except courses leading to a recognised degree or certificate. Many decisions and orders of the Tribunal set aside demands of service tax on non-recognised courses offered by registered charitable societies, on the ground that there was no profit motive and that therefore these were not 'commercial'. The law was amended retrospectively in 2010 to say that any course run for a fee is considered commercial. This brought all the disputed cases under the purview of the tax.