Indian IT department sends tax demand notices to global funds

Описание: It is not the Cayman Islands this time, but Mauritius and Singapore!

The Indian Income Tax authorities go back on their own promise and put a brake on the 'once protected' grandfathered transactions!!

Gov. grants benefits & assures to not open up pre-2017 transactions Attracts foreign funds Withdraws all the benefits + penalises pre-2017 funds

The formula surely doesn't add up! The tax department can't have its cake and eat it too!

The department has issued demand notices to 9-10 year-old transactions done from Mauritius, Singapore and opened up grandfathered transactions under the pretext of invoking judicial GAAR by calling such transactions 'sham' (fake & fraudulent).

The tax department's case is likely to be overturned in courts, but until that time these funds have been asked to deposit full tax amounts, slapped with backdated interest and penalties.

And guess which funds are they chasing? Apparently 12, but we hear other large funds have also been given notices.

But what is this probe into? Is it for,

Lack of substance?

Lack of decision making in treaty jurisdictions?

Use of a treaty only for tax exemption?

Orchestrating a complete fraud with no foundation whatsoever?

Or are the tax officers opening assessments for their selfish purposes by means of tax terrorism?

Where is the bright-line test for grandfathering if genuine prior investments can be opened up without cogent reasons?

Also - what do PE funds do because they need to return money to their LPs as their fund life comes to an end!

Do you think the foreign investors who were invited on a promise & are now shown the door by denying the promised benefits, will lose faith in the Indian government?

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