With just one case where Vodafone won Rs 22,000-crore retrospective case against the Indian tax department in international arbitration, India had lost its investor-friendly face and violated the bilateral agreement with the Netherlands.
The Indian government should accept the international arbitration panel ruling in favor of Vodafone and cancel the retrospective tax and should understand that the International Community treats this as tax terrorism.
The chances to succeed in any legal challenge of the present verdict in Singapore or Hague are likely to be slender. It will be a suicide attempt for India to file a challenge and fail.
In these desperate and unprecedented times, India needs to project an investor-friendly image to attract foreign investments. Faith and confidence-building is a long time process. Certainty in tax laws will boost the investor-friendly image of India.
My take is that if PM Modi is a true reformer, he should bury the Vodafone case. And further PM should cancel the Congress-led UPA government's retrospective amendment to the Income Tax Act, 1961 to tax "indirect transfers" and uphold the bilateral treaty with the Netherlands and build investor-friendly India which will attract more FDI.
