What was retrospective tax law?

In a similar fashion, with respect to law or statute, it simply means ‘taking effect from a date in the past’. Therefore, if there is an amendment to the law and it is applicable from a specified date in the past but not future, it is termed as a retrospective amendment.

Who introduced retrospective tax?

Retrospective tax regime in India The trigger to introduce the retrospective taxation in India was the Vodafone-Hutchison deal in 2007. In May 2007, Vodafone had bought a 67 percent stake in Hutchison. The government raised a tax demand of Rs 7,990 crore in capital gains and withholding tax.

Can a tax law be applied retrospectively?

As a general rule, laws shall have only a prospective effect and must not be applied retroactively in such a way as to apply to pending disputes and cases. A law is considered retroactivity if it is clearly expressed in the language of the statute[8].

What is the purpose of taxation law?

The main purpose of taxation is to raise revenue for the services and income supports the community needs. Public revenues should be adequate for that purpose. 2. Tax should, as far as possible, be levied equitably, according to ability to pay.

What is retrospective effect in law?

The meaning of the word retrospective is backdated or to look back. Therefore, the retrospective law is a law that has backdated effect or is effective since before the time it is passed. The retrospective law is also referred to as ex post facto law.

Can law retrospective effect?

20(1) of the Indian constitution imposes a limitation on the law making power of the constitution. It prohibits the legislature to make retrospective criminal laws however it does not prohibit a civil liability retrospectively i.e. with effect from a past date. So a tax can be imposed retrospectively.

How is tax law created?

The tax bill is initiated in the House of Representatives and referred to the Ways and Means Committee. When members of this committee reach agreement about the legislation, they write a proposed law. After Congress passes the bill, it goes to the president, who can either sign it into law or veto it.